#453 – TikTok Shop Secrets: How Influencers & Algorithms Are Rewriting E-Commerce
Can TikTok Shop really be the ultimate game-changer for brands aiming to make millions together with Amazon? Join us as we welcome Sohun Sanka, who brings firsthand experience from TikTok Shop’s inception in the US, to uncover the secrets behind this booming social commerce platform. From algorithms to government scrutiny, we dissect what makes TikTok a revolutionary tool for brand success and how it stands apart from traditional platforms like Amazon and Shopify.
Discover how TikTok Shop’s seamless in-app purchasing is setting new standards in e-commerce, offering brands lower CPMs and remarkable attribution capabilities. We take you through the maze of TikTok’s advertising landscape, highlighting innovative ad types like Spark ads and live shopping ads that are transforming consumer engagement. Learn the strategic differences between organic content and paid ads, and why TikTok’s approach to integrating shopping links directly into videos can potentially skyrocket your brand’s conversions and awareness.
Engaging influencers effectively on TikTok is more than just a trend; it’s a necessity. We explore the evolving landscape of influencer marketing with a focus on performance-based agreements and gamification. Hear about the transition from flat fee models to dynamic commission structures, and how brands are fostering communities of brand ambassadors to drive unmatched success. Dive into the intricacies of TikTok’s strict content guidelines and discover how clear content blueprints can elevate your affiliate program. With Sohun’s insights, unlock the potential to optimize your brand’s impact on TikTok Shop like never before.
In episode 453 of the AM/PM Podcast, Kevin and Sohun discuss:
- 00:00 – TikTok Shop Strategy and Success
- 02:32 – Early Days of TikTok Shop
- 10:46 – The Power of Social Commerce
- 13:38 – TikTok Shop Advertising Strategy Insights
- 18:54 – Boosting Amazon Sales Through TikTok
- 19:32 – Effective Influencer Acquisition Strategies
- 24:45 – Creator Acquisition Lever Through Contests
- 27:22 – Influencer Retainer Strategies & Success
- 29:06 – Influencer Ambassador Program Success Strategies
- 34:28 – Strategic Approach to TikTok Marketing
- 36:41 – TikTok Shop Rules and Strategies
- 40:10 – Impact of Brand Affiliate Programs
Transcript
Kevin King:
Welcome to episode 453 of the AM/PM podcast. You know social commerce is blowing up and especially when it comes to TikTok as a discovery platform. Amazon’s tried to replicate it with Inspire and they just can’t do it. But TikTok as a discovery platform, the new infomercial or the new credibility builder for brand new brands and existing brands is huge. I know someone I just met someone recently doing $21 million in sales for pants per year on TikTok. It’s crazy what it can do, but there’s a strategy and a certain way that you got to do it and that’s what we’re going to talk about today and we’re going to talk strategy and actionable stuff that you can do to really blow up your opportunities when it comes to selling on TikTok and TikTok shop. Enjoy.
Kevin King:
You know it’s one of the hottest things that’s out there right now. Everybody is talking about TikTok and TikTok shop and how there’s people are making just crazy money and I just met someone at the time of this recording just last week, that’s doing $21 million a year on TikTok shop and they’re doing zero on Amazon, zero, zero sales. They don’t even exist on Amazon, but they’re doing $21 million on TikTok shop, and so I know a lot of you have been hearing about this. A lot of you are worried about what’s going on in the TikTok shop world. Is TikTok going to even exist? How do you figure out what’s selling? How do you figure out who to deal with on influencers? And we have one of the guys from Yuka on today, Sohun Sanka. How are you doing, Sohun?
Kevin King:
Doing good. Yeah, excited to be on here and talk more about TikTok shop.
Kevin King:
So this TikTok shop, just let’s get a little background. I don’t know how long have you been working with TikTok?
Kevin King:
I actually been working on it almost since it started. Worked on the agency side, managing brands on TikTok Shop before I came to Yuka in about 2023. So really early days since the platform started to kick off in the US.
Kevin King:
So it started like back in like about 10 years ago as a like a karaoke platform right called Musically or something like that. So I remember hearing Gary V talk about I don’t know 20, maybe it’s 2015, 2016, 2017ish somewhere around in there, talking about something called Musically. He’s like this is going to be the next hot thing. All the kids are on there. And then I went and looked at it. I was like okay, yeah, I can see if you’re a teenager you might want to be on that. I didn’t pay any attention to it. And then in 20, I think it was 2018 or 2019, I was in Miami at one of Grant Cardone’s I don’t know one of his silly little 10X conferences or whatever. And I went to a party and a friend of mine introduced me to some guys and was like, hey, have you checked out TikTok? I’m like what’s TikTok? And I didn’t know it was the rebranding of Musically. But I was like no, I haven’t. So I looked at it. I was like, oh, this is pretty cool. And ever since then TikTok has been like my when I can’t fall asleep or when I’m bored, it’s actually what I watch. I don’t use it as a search engine. I don’t use it in a way a lot of the younger generation does, but you know it’s kept me entertained numerous times. But since then it’s blown up. I mean so you’ve seen the rise of TikTok if you were on the agency side, now you’re on the inside.
Kevin King:
Yeah, yeah now I’m on the tech side TikTok shop partner. We talk to the guys at TikTok a lot and my generation calls it doom scrolling. So you know, just being on TikTok endlessly and the algorithm sucks you in, it’s just really powerful because you’re getting people who just you know are spending time on social media like a good time of their day just on social media, and now you just have a really easy way to market to them and talk to them, right?
Kevin King:
So what is it about that algorithm? I mean that’s the big controversy right now. I mean it’s so good that the US government a year ago banned it, basically, and then Trump was on board originally to ban it and it helped him get reelected because it was so good at helping get into his audience. So now he’s like I don’t know. We just had last week June 19th was one of the deadlines and it got extended again. So he’s given it time to work this out. But that algorithm a lot of people say, well, if TikTok sells to Amazon or to Oracle or to whoever may end up buying it at some point, the Chinese are like the algorithm doesn’t go with it. That algorithm is our secret sauce and it’s not going with it. What is it about that algorithm? Like you just said that in this doomsday scroll that just makes it so addictive and compelling versus reels or Instagram or YouTube shorts or Facebook. Why is it so powerful? What is it that it does that the others just can’t seem to put their finger on?
Kevin King:
Yeah, so it’s slightly different than like an Instagram, right? If you look at, you know, for example, Power Digital’s marketing report right, state of 2025 organic it actually shows that over 70% of users on TikTok spend their time on the Discover page and so we’re really seeing a lot of users and people use it as a discovery engine or search engine. Right, just because the platform is able to personalize such niche recommendations to everyone who’s scrolling on it. Right, rather than other social media platforms like Instagram, where people are actually spending most of their time on their home feed following creators and communities and trends specifically. Right, not necessarily on the explore page to the highest degree as TikTok. So the fact that people are always discovering if you insert any sort of like sponsored content or make that video very frictionless or easy to purchase on is very powerful from a demand generation perspective, and that’s why people are really looking at TikTok shop as the number one social commerce platform right now.
Kevin King:
I mean, TikTok shop has been booming, I mean, and a lot of Amazon sellers are like you need to be on TikTok. But if you look at TikTok shop, TikTok has been growing. 170 plus million people in the US. I think it’s actually a lot. The US is not as big as the market. China is its number one market. It’s a different name over there, Douyin, but in Indonesia it’s biggest non-Chinese market, bigger than the US. A lot of people don’t realize how big it is in Indonesia, but it’s growing but it’s still small when you put it in perspective to Amazon, Amazon did GMV of about 700, some odd million in 2024. TikTok did it depends on what numbers you believe somewhere around 15 to 20 million. I’m sorry, billion, I said million, I meant billion. 15 to 20 billion, that’s a weekend for Amazon. That’s not that much. But in perspective, when you hear someone like this people I just said selling pants for women doing $21 million a year, their warehouse in Houston selling pants, reselling pants, basically it’s not even their own brand, that’s just. It wakes up, people, gets people’s attention. So the power of TikTok is crazy.
Kevin King:
Yeah, it’s, it’s insane. And when you think about the organic lift that comes after right. Like if you think about the customer acquisition costs as opposed to like using a ton of Amazon PPC spend to acquire the customer first, right, this whole, like you know, pay later after the sale is done makes it a lot more cash flow efficient on the business and it’s really a growth channel you can layer into like your omni channel business right. Like TikTok you know Amazon loves TikTok because of, like the off platform traffic that it’s driving right the brand referral bonus, that ranking boost, right. So it’s not just like TikTok shop as a closed ended channel versus Amazon, but TikTok shop as a lever in terms of your omni channel engine, you know, to drive more growth to your DTC and Amazon. And it is still, like you know, one year into its development, right. Comparing it to Amazon, who’s had almost a decade, you know, to really develop as a marketplace isn’t always fair, but if you look at the compound aggregate growth rate and how it’s pacing, I think I, based on the research I’ve been doing, it should be pacing towards a $80 million total addressable market in the US right now. So it is still growing fast, but definitely not the same purchase volume as Amazon right now.
Kevin King:
You said $80 million addressable market.
Kevin King:
Yeah. So right now there’s done like or I guess like 80 billion in total transactions.
Kevin King:
80 billion, not million.
Kevin King:
Sorry, 80 billion. Yeah, 80 billion. Yes, because, like right now, it’s already sitting at around 15, 20 billion, but it’s pacing towards 80 billion and with the rise of the ShopMize, the Shopify collabs and the flip apps and social commerce just starting to develop as a whole, I can see that number getting a lot higher as customers get more accustomed to purchasing, you know, on these more deal focused marketplaces off of Amazon as well.
Kevin King:
Well, Amazon’s primarily a buying engine. It’s a marketplace. You go there, you kind of know what you want to buy. Most people I mean there are some that go in there and randomly you know window shop and look for stuff, but for the most part people are going there with an intention. I need to solve a problem. I need this particular item; I’m going to buy it on versus TikTok. You’re going there to be entertained and oh, by the way, here’s something that’s pretty cool, here’s this cool gadget or cool pair of jeans or this cool whatever that you didn’t know about. TikTok knows how to target that, based on everything else you’ve looked at. I always say that if you want to know somebody, if you’re dating, if you’re going on a date, first thing you know you’re at Match.com and you’re meeting for coffee the first time, one of the first things I’d say, if this looks like it’s going to be serious, like can I borrow your phone for a second? I want to look at your TikTok scroll. And if you look at the TikTok scroll you are going to know everything about that person. Whether they are into girls with big boobs walking down the street or if they are into puppies, or they are into cats, or they are into astrophysics or into a the most controversial stuff, you’re going to know, because that feeds it and then it knows what those type of people want to see from a product point of view and the influence point of view and it’s a powerful thing. Amazon tried to copy that with Inspire and some of their stuff and they just can’t make it work and TikTok has got that dialed in.
Kevin King:
I agree with you, social commerce is. I think it’s the one-two punch. You need the place where people are comfortable with their credit card and comfortable to buy. They know that they can return it easily. They know all that. That’s Amazon, or it could be Walmart or Shopify, but it’s primarily Amazon. But they also need the place where it’s the infomercial of today. You know, remember you’re too young, but 20 years ago you turn on tv. I remember watching e-entertainment television and after about midnight, uh, it would turn into mostly infomercials. And on weekends, during the day, it’s infomercials for different kitchen gadgets or different videos. Or I remember girls gone wild was a huge video thing that was all sold on by infomercial VHS tapes that were sent of girls partying and getting crazy. That did millions and millions of dollars. That’s the old. That’s really doesn’t. It still exists. But it’s kind of moved now to social and so. But mining that a lot of people don’t know how to mine that. They don’t know how to actually do that. There is a science to it. It’s not just post once and hope and pray. It’s the good people are posting two, three, four, five times a day, doing testing, doing all kinds of stuff. What are you seeing that the people that are having the most success driving traffic on TikTok and growing their brands are doing?
Kevin King:
Yeah. So I think with social media, right, you’ve got to think about the people who are on there. Like, of course, 49% is about Gen Z and of course Gen Alpha is going to be coming up in there, but there’s actually a lot of people who are just on their doom scrolling, who are slightly older, right? So the biggest thing is to make it make the content. The biggest thing is to make the content look native, right. I think on Amazon, since you’re capturing demand, there’s a lot of like infographics and like very specific bullets to like drive the purchase from consideration. But on TikTok shop, you want to focus more on the awareness stage and make the content have really nice hooks or like layer in trending audios and trending sounds and create a bunch of characteristics that are really mirroring what already is kind of going viral, right. A lot of what works on TikTok is that lifestyle content that’s relatable and authentic, where someone’s going through an influencer or affiliate’s day in the life or they’ll do like a get ready with me, right, where the influencer is really just talking through their daily routine. They might be applying on a certain product and have it linked in the bottom of the video so that people can kind of check it out, but the content’s not really being force-fed to them. It’s being showcased in a very creative way and filmed in a way that’s native to the platform.
Kevin King:
Yeah, it’s interesting how the psychology works, that people tend to trust a complete stranger that’s kind of like them or that they can relate to over a big brand that’s well known. And that’s the magic of it is a complete stranger can influence you more than some brand that’s taken out Super Bowl ads and that’s the power of it. What are the rules when it comes to actually you can on TikTok shop. You can actually go and you can buy it. Usually there’s a link or you can go into TikTok shop and search. But if someone’s got an ad or organic thing coming across and they’re pitching you know some makeup thing, like you said, they can drive it to TikTok shop. But what are the rules of actually driving it to your Shopify store, to Amazon? Can you link it? Do you have to gently say, oh, check out Amazon, or is the AI going to pick that up and block that video if it’s not an ad? What are the rules in actually driving traffic besides TikTok shop? What are the rules?
Kevin King:
Yeah, so I definitely wouldn’t put any sort of language around Amazon in your TikTok content. I think that can get flagged pretty quickly, especially if it’s shoppable content. Your TikTok shop links your Shopify store or you can fulfill that inventory via Amazon FBA, right, um, so you know from there. It’s really just about how can I make it convert within TikTok shop, like that’s. That’s really the advantage of TikTok shop as opposed to Amazon, because, like, if I were to choose as a consumer, where I want to make the purchase, I would choose Amazon a lot, just because I know it’s super trusted, I’m going to get my product very, very quickly and the return policy is good, like you said right, but with TikTok shop, because I can just purchase within the video without having to leave to Shopify or go to another destination in Amazon. That’s really the value add. So you just click on a link it’s actually embedded in the video at the bottom and then you make the purchase straight from there.
Kevin King:
It’s pretty. I’ve bought quite a few things off of TikTok and it’s pretty, pretty well integrated and it’s you clicked a couple of times and if you got your stuff saved just like you do on Amazon it’s like it’s done, I mean, and like one, two, three clicks and then you’re right back into your doom scroll. You don’t got to navigate around and like where was I or what was I looking at. It’ll take you right back in. Which is it’s brilliant, and the discovery mechanism on there is just it’s crazy. So what’s the difference between when someone runs organic and I go out and my buddy just, you know, my wife, I don’t know, my wife goes on and she shows herself, she’s just posting and here’s me doing my, my makeup, and then versus someone taking that and creating an ad around that, what’s the? what’s the difference in the reach or the strategy on that?
Kevin King:
Yeah, so I mean, with any sort of like off platform affiliate marketing, I think like a really big pain point is attribution. I mean, I think from anyone who’s ran any Amazon affiliate marketing campaigns with those Amazon attribution links, like the attribution is a little bit poor. So with TikTok shop because you’re solving and keeping it all within one platform and it’s in the video, like you know exactly where the customer is purchasing and the purchase is happening within the platform the attribution and measurement is just like a lot better, right, and TikTok ads traditionally aren’t super great at conversion, you know, compared to like the rise you’d get on a meta. But the CPM is a lot better because TikTok is more of a discovery brand awareness platform, right? So if you look at industry average CPMs on TikTok versus industry average CPMs on Meta, it’s often like several times lower. So if I’m running like a TikTok, you know it’s a D toC strategy and my goal is brand awareness. Maybe that would make sense. Alternatively, on TikTok shop you can use what are called spark ads and take an existing content with that shoppable video link embedded in it and just set it towards a brand awareness goal and the benefit there is that the purchase link is still happening within that video. You don’t need to go through multiple touch points off somewhere else and you still have that brand awareness goal, so you can hit a slightly lower CPM.
Kevin King:
Now there’s two types of ads on TikTok. Right there’s Spark ads, and what’s the other one, Ad Max?
Kevin King:
GMV Max, GMV Max. And then there’s live shopping ads too.
Kevin King:
What’s the difference between those?
Kevin King:
Yeah, so GMV Max is essentially like a think of it, like an advantage plus, like for Meta, but like on steroids, right. It’s like a very automated ad type that does very rapid creative testing on every single video with a shoppable link on there out there, right? So whether it’s organic, whether it’s an influencer ad, anything out there with a TikTok shop video link is put into that ads engine and just test it. And so with GMV Max, you want to have a large amount of creative running through that engine because you want to make sure that that ad type has a lot of creative to test. With video shopping ads you’re back to precision, you’re back to testing different hooks and angles, and if you want a bit more control and precision. That’s when I’d use a video shopping ad.
Kevin King:
So in the Spark ads are the precision ones taking a user’s content, getting their permission to. Actually, can I run this as an ad and you’re gonna make a little bit extra commission, but I’m gonna put the ad dollars behind it because it worked organically, basically, and you’re picking the ones versus GMB Max, is it’s the algorithm is you’re spinning up? Here’s 10 different ways to sell this product. It’s gonna figure out which one of those works best and double down on that product.
Kevin King:
Yeah, exactly, it’ll take everything. Figure out what works. You know Spark ads right, you just choose the one that you want exactly, and the way that works is creators actually give you a string of characters called a Spark code and then you input that into the ads manager and that allows you permissions to amplify that existing creative. So it’s not creative by creative basis versus all the creative out there in the ecosystem.
Kevin King:
And the benefit is, like you said, a lot of people can buy on Shopify I’m sorry, on TikTok shop, which might tie into your Shopify on the backside or be fulfilled by Amazon, but also a lot of people. They will see the ad even though it’s there on TikTok, or they’ll see the post. They trust Amazon. So there’s something called the halo effect, where people will start to go to Amazon and type in the brand name or the product name or something and just buy it there, and so a lot of times, what kind of stories have you heard of like Amazon sellers? What kind of lift have they gotten on Amazon just because they were running TikTok? Like 20, 30, 50, 100% lift on sales?
Kevin King:
Yeah, so I don’t have like conclusive numbers right now. Transparently, like you know, our tech is working with a few other Amazon partners and, you know, trying to get that data to prove a conclusive correlation. I know it’s like a lot of the Amazon sellers, the data and the numbers really matter. So I’m not going to speak to anything from a conversion lift. But I will say, when I was managing brands at an agency that I worked at previous to here, when we’re managing them on TikTok shop and on Amazon, when we got a video that really kicked off on TikTok shop, we saw a 10x spike in branded search on Amazon, right. So it’s really just emphasizing that if people see that product on TikTok shop, they’ll go and learn more on Amazon and so of course, like you know, that’ll have maybe like a 15% or 20% lift in conversion. But that’s largely dependent on like what sort of levers they’re pulling on Amazon. You know, because at that time we were launching the brand on Amazon and TikTok shop at the same time, so there may have been a slightly higher lift because there weren’t as many levers being pulled at that moment.
Kevin King:
I mean, one of the things I like about TikTok shop is in the data transparency. So if I’m trying to get an influencer on Instagram or on YouTube, I’ve got to go and I’ve got to do my research. Look at how many followers I got, what’s their engagement rate. There’s tools that will show you this kind of stuff, but I have no idea if these people can sell or not. They may tell me here’s a client, I did X amount and they’re asking for their fee or whatever up front because of something, but on TikTok it shows me right there. It says this is what this creator has sold through TikTok shop, and I can tell exactly who knows how to sell in their videos and who doesn’t. And then so what should I be looking for when I’m going in there and doing my research and, like your tool and some of the other tools, should I be looking for people that have crushed it? Or those are the more competitive people, those are the Kim Kardashians and that type, and I should actually be looking for up and comers? Or what’s a strategy that I should be looking for when I’m trying to find people creators to partner with when it comes to TikTok?
Kevin King:
Yeah. So I think, now that people can see sales, there’s also the negative side of it, where everyone’s reaching after the same pool of creators. Right, they’re reaching out to the 10K plus in the last 30 days. But, on the flip side, why would those creators want to work with the newer shop? Because while their creator sales are visible, your shop sales are also visible, so those creators are less likely to respond to those newer, cold starting shops, right? What I would do if I were a newer shop, you know, or if I’m like getting my Amazon brand on TikTok shop is work with more of those up and comers, right, I would focus on creator relevance at a significant amount of scale. And I’m going to call back to something I said earlier TikTok is a discovery platform, a discovery engine, right? So follower count, you know sales. That’s a good proxy, you know, for someone who’s likely to sell, but it’s not conclusive, because 80% of people are spending their time on the discover page. So you want to look at people who are creating relevant content and are up and coming for your brand, right, or for your category, and then get them to post as many times as possible and turn them into ambassadors and I would rather have a thousand of those guys than maybe 10 of the Kim Kardashians. You know who have generated, like you know, millions in GMV, or you know things like that.
Kevin King:
What are the keys to getting an influencer to respond to me? Is it the personalization? Is it that I’m offering a bigger commission than someone else? I had a guy speak at my Billion Dollar Seller summit. He actually won best speaker and he has a process because he’s like so many people just want free stuff on TikTok and I’m sending out a thousand messages and you know 50 of them, or a hundred of them, reply back and I ended up sending them a free sample of my product and one or two of them actually do something. So he’s got a process where he puts them through a 30 question questionnaire before he will send them anything and most people won’t do that. He said the vast. You know that actually a lot of people are like heck with you. I’ll go on to the next guy but the people that do it, he knows they’re serious and he knows that they’re going to end up doing something and he’s done very, very well with this process of weaning them out and actually seeing who is actually really going to do something. So what are you seeing actually works, because a lot of people are always afraid to give away too much.
Kevin King:
I’m of the opinion like if I’m using influencers, I would stack them. I would I got a new product I’m launching. I would be like, hey, I’m launching this new protein, a vegan protein powder, on July 15th. From July 8th to the 15th, I want to do this promotion. I want you to be posting every day from July 8th to the 15th and I would be like, okay, I’m gonna give you a hundred percent commission on everything you sell and whoever sells the most, I’m going to give you a free cruise, or I’m going to give you an iPad, or I’m going to give you something like some of these big, I’m going to have some sort of contest and I’ll give away the whole farm just to get the cycle going, because I know there’s going to be a halo effect on Amazon. I know that’s going to go viral, it’s going to get shared. And then I would take a targeted audience and if I had 10 influencers doing this, I would take them and run Spark ads or the Mac stuff behind it just to a select group of people, like a targeted 10, 20, 50,000 people, so that in their feed they’re constantly seeing this like, oh my God, this is going crazy. Everybody’s talking about this, and I would create some sort of campaign. Are people going to that level? Uh, or just the sophisticated brands and the Amazon average Amazon seller is just not doing much.
Kevin King:
Yeah, so funny, funny enough, you hit on. You hit on a point that’s uh, you know we just launched an R roadmap and sort of, where I see the acquisition of creators heading to. So I think everyone is doing this. You know, x amount of commission and free product, and I’ve seen people lever up that commission like 50, 60%, but creators just aren’t interested. So what I think would work very well is actually reaching out to creators and inviting them to a contest and within that contest, you just simply explain to the creator if you post three times, we’re going to pay you cash and that’s your creator acquisition lever. And what’s interesting about that is, on one hand, you have creators that aren’t even guaranteed to post at all, you know, because they just have so much going on. But then, on the other hand, you pay $20, maybe, right, and you get that creator to post three times. Your three times is more likely to have a video, a piece of content that could be boosted by ads. You’re more likely to have an engaged creator. It’s an ambassador that you can involve in your newsletter and community program, and that message is super differentiated from all the other general messages. So that’s what I see working best. That’s where I think sellers are going to be headed. The reason why people haven’t been doing that is because it takes a lot of manual work to track and automate payouts of contests at different tiers, and with TikTok Shop, the scale can eat you alive if you add that on top of your scope. So what we’ve done is we’ve automated the tracking analytics, payout collection of usage rights, spark code collection as well, and then you can invite creators into a recurring contest or incentive program and guarantee that certain posts per creator. That’s where the future of outreach is really heading.
Kevin King:
So that would help too. If I’m a brand new product that I’m launching, I have no track history. So when they look at my GMV on TikTok they’re like this guy’s nervous. I don’t know if I want to sell that, I don’t know if it’ll sell. But if I give them a flat fee and say, look, you post three times, I’ll give you $25 a post at least they know they’re getting 75 bucks. And then if it actually sells, then I go holy cow, I sold 22 of those. I also got an affiliate commission off of that. All right, I’ll do this and that kind of starts that whole flywheel and then other creators will pay attention and will get the ball rolling. So you’re saying that’s a good strategy to do. How many creators are really charging right now? Are a lot of creators through your program saying, okay, I want a flat fee? Cause I remember five years, 10 years, five years, seven years ago there’s this company called FameBit and a couple others before TikTok really took off, and you would go to people and you would pay them 200 bucks, 500 bucks, a thousand bucks, 10,000 bucks to actually post once or twice or three times and there wasn’t really an affiliate commission for a lot of them. But have those days gone away and it’s mostly affiliate based now? Or is it a combination of affiliate and flat fee in a lot of cases?
Kevin King:
Well, you’ve got to understand that everyone, just like TikTok, just mashed TikTok shop on top of a bunch of influencers who were charging retainers per post. Right, everyone was doing flat fee per post on TikTok. Besides, like some of the influencers who you know use like commission junction or like other things or like to do affiliate. So what’s happening is we are going to we are seeing a lot of retainer based models coming in, but the rate is brought down a lot because, like, if I move an influencer to retainer on TikTok shop, now that I can see their sales, now that I understand they’re going to earn more through commission than their retainer anyways, I get to look at first party sales data on my shop to validate how much I’m going to pay them. So now people are doing volume-based retainers where they’re doing a couple hundred bucks, maybe a thousand bucks if they’re very good for 15 posts or 30 posts per month, month, because they know volume is the game.
Kevin King:
So are you seeing people actually have tiers on their commissions, like to motivate some of the creators? Like, okay, if you hit a thousand dollars in sales, a thousand dollars and less, I’ll give you a 20% commission, but if you hit a thousand to $2,500 in sales I’ll give you a 25% commission and then tier it up? Are you seeing anybody doing any of that kind of stuff to extra motivate them, to actually really push you?
Kevin King:
Yeah, the best way to be successful on TikTok shop is gamification and building community. So one thing that we harp on a lot is the goal gradient effect, which sort of preaches that as people get closer to their goal they work harder. So if you use tiers as a basis to ladder people up through cash rewards and commission increases, they eventually turn into this brand ambassador and you kind of string them along the way with performance contingent rewards and I find that to work a lot better in the long run for your brand, as opposed to offering a high commission out the gate right. Because, let’s say you offer a high commission out the gate, what happens is once you take that commission away, you see the sales performance dip even more below a baseline than if you had offered a basic commission and then you can never build a sustainable you know, profitable growth engine on TikTok shop.
Kevin King:
I know someone like uh, snow, the snow whitening, uh guys, you know the teeth whitening stuff. They did like 100 million dollars on TikTok. I think Maybe it was a combination of TikTok and Amazon, but TikTok drove the vast majority of it. He said that their strategy was to actually get 50 to 75 brand ambassadors, and so they narrowed it down. They went through thousands or hundreds or thousands of creators and then they would basically the weaker ones, they would kind of fade them off and they created this core group of ambassadors and that’s who they launch everything to and they got kind of them in their ecosystem so they can reach out to them directly. Uh, and they’re saying that’s what’s driven a lot of their success. And then they compete amongst each other and then they’ll fly them out for a weekend party in Miami or something and do all kinds of stuff to really cater to them. Are you seeing people do that kind of level of stuff as well?
Kevin King:
I think with those programs, everyone’s trying to move their creators onto a Discord, onto a WhatsApp, create that community. I think everyone wants to be at that Snow White goal. I would just argue that what’s the qualified candidate to enter that ambassador program? If Snow Whitening is narrowing it down from influencers who are generating thousands already and those don’t make the cut and they’re having a super elite group? Who’s going to maintain that group? How is the prize structure going to be oriented to? You know, be incentivizing them, like those are the things like that where you’d have to think about before you implement anything super exclusive, because, remember, everyone is going after the top creators on TikTok shop. You don’t really have much bargaining power if you’re a newer shop, so you’ve either got to make your own or you’ve got to have a really attractive offer to even create this core group. That’s sticky in the first place.
Kevin King:
A lot of 13-year-olds. When I was young you’d ask a 13-year-old what they want to do when they grow up. They’d say I want to be an astronaut or a doctor or a lawyer. Now you ask a 13 year old, they like I want to be a creator. But you look at some of the statistics out there and you hear all these really cool success stories and gets everybody’s eyes wide and like excited. But it’s almost like the NFL. You know, you got the high school kids that all think they’re going to be playing the NFL one day and be a Superbowl winning quarterback. But really, once you go through high school and to college and then to the pros and then make it up, very few actually make it to the elite level. And it’s the same thing with creators. Doesn’t the average creator make like five grand a year or something like that? I saw some statistics. It was definitely in the four figures or below five figures. Do you know anything on what the average creator makes per year? So a lot of these are just they’re not that successful actually.
Kevin King:
Oh, most aren’t. And like this is perfect timing. So I work personally with a few of our eight figure plus brands on TikTok shop and I do affiliate program audits of, like the health of their entire program and I tear out the GMV level and show them the percentages and, like usually these guys have like 100,000 affiliates. They’re doing 10s of million dollars a year on TikTok shop and I find that point 5% of their influencers and this is to date of their entire program do over $10,000 in GMV. And then it’s usually like another like point 7% do over 1000 to 10,000. Right, and then it goes up to like 3% do like a hundred dollars to a thousand, and then the ones that do over $1 in sales lifetime is like maybe 8%. So when you take cumulative, you know of all the influencers on TikTok shop for these mega brands right, where everyone can already see that they’re selling like crazy, it’s like less than 10% of influencers to date only make a dollar or more in sales, right, and so like where does that leave you with most of the affiliates on TikTok shop in general? Like 90% of their affiliates aren’t making any sales, right, and I think it’s. When you look at the data like that. It’s very interesting. Because everyone’s querying straight to these 10k plus, but they’re the 0.5% of creators for these multimillion dollar TikTok shop brands. That’s sort of like a. It’s not a very realistic dream outcome. To get back to your question.
Kevin King:
So what is it? Just a numbers game. You just start with some of these guys that are. They’re at the $1 level and you just hope that one of them breaks through and they ride the wave with you, ride the wave with them and they ride it with you. There’s a lot of people that say, hey, a soccer mom who is very active in her three kids soccer league and she goes to all the games and they run little weekend parties with all the other parents and stuff. She may have more influence in her little world of influencing 50 people that come to the parties than some big influencer that’s the Kim Kardashian or whatever. Should you be trying to strive for more, trying to find these little golden nuggets that actually everybody in her circle listens to her and grow? You know, I just heard someone speak that does knitting. They sell knitting supplies for like yarn and stuff like that and one of their advantages is they really niche down into these women who have a whole like little meetups at their house with 20 other women or 15 other women and eat some snacks and knit stuff. Uh, but that one person that’s leading that can influence all 15 of those people into buying something and they’re going after that kind of thing. Should that be a strategy, or should it? What? What should your? What should your strategy be? If you’re new, I’m like, okay, everybody keeps talking about TikTok is awesome, I gotta do this. What do I do?
Kevin King:
Yeah. So the first thing you need to do is like understand the content style that’s working on the platform, right? Because, like, if most people are on the Discover page, it’s not necessarily about the influencer and how engaged their audience is. It’s about if your content was served through TikTok’s algorithm, is it likely to induce a purchase from a stranger? So the first thing I would do is do a competitive analysis, get on Yuka, pull all the top hooks, selling points and content styles for similar products that are trending in real time. I’d go and do research on hashtag basis as well as the content style basis to figure out ways to creatively showcase my product and create my first creative brief. If I have a baseline as a brand and I understand my customers’ pain points, I have a list of non-branded search terms I pulled from Helium 10 for my Amazon brand. I’d plug those in and figure out how does my product translate into niches on TikTok and then what’s a creative format that can help solve a problem for those people in that niche? And then I would go reach out to those creators, enable follow-up messages, start a contest, gamify that program in the earlier days as a better acquisition lever, and then I’d automate as much of the process as possible. I would automate reminding creators to post. I would automate engagement after the sample has been requested. I’d automate the tiering invitation collection of Spark codes and usage rights so that, as it grows, it’s easy to scale.
Kevin King:
What about AI in the video? Should I be using real people, or there’s some tools, and I think TikTok even allows you to do this. They’ll create some AI-based stuff for you. Now what are you seeing? Is the AI stuff comparable to the human-based stuff, or is it lagging behind or crushing the human-based? What are you seeing there?
Kevin King:
Yeah, so that’s also something we’re working on and testing, I would say, in terms of like a zero to one video generation for long form content. I would still stick with real people, because after a certain amount of time, you can kind of feel that there’s something off and that this isn’t a person. However, if you’re running a Meta ad, right, and you want to use a hook where it’s like eight seconds of an AI generated person, with the technology out there, you just can’t tell that it’s AI and it’s a very cost effective way to get creative and get started without sending hundreds of pieces of product out.
Kevin King:
How strict is TikTok on claims and stuff you know on Amazon? You can’t say this helps you lose weight, or you can’t isolate certain nationalities or you can’t. You know this is, this is for brown skin people you can’t really say that. Or this is for, you know, overweight people that need to lose weight, or this is for depression. What are the? How tight is TikTok on rules and claims and regulations and stuff like that? You got to really have it buttoned up.
Kevin King:
Yeah, they’re. They’re pretty tight, Especially if you want to spark it and run ads on it, of course that’s. That’s even more tight, like, you can’t make dramatic claims saying if you use this cream, you know everything’s going to be 100% better tomorrow, right, like that, that wouldn’t work. There is a bit of distance, right, since you’re working through creators rather than promoting through the brand handle. There’s a bit more flexibility, right, because TikTok doesn’t allow you to review and stop the creator’s content. They’ll just make that creator video not shoppable or, like that creator video can’t earn dollars on it, right. So that there is, there’s some distance, is a little less. A little bit less strict there, right. But if you went from the brand handle and made those claims, you get violations on your account and you could actually be sometimes outright banned very, very quickly. I think on Amazon, like, sometimes they’ll give you a warning, but sometimes on TikTok, if you just cross the line that one time and try to go straight into some more gray hat stuff, boom, you’re out. So just be careful, for sure.
Kevin King:
What do you see working? You look at a lot of brands. You said you’re helping a lot of these seven, eight-figure brands. What are you seeing? That’s like a trend on right now. What’s the hot? Like one or two, three things that this kind of hook or this kind of video style is just really taking off and maybe people should take a look at. Look at that.
Kevin King:
I mean, that’s very like brand dependent and industry dependent. I would say the hot tactic right now is maximizing post rate per affiliate, right, getting the affiliate to post more than one time. And what I’m super gung ho about and you know I work with these brands closely on is running a contest. Running a contest where it’s very easy to hit that first reward. But you get the affiliate to post at least three to five times. And if you can increase your post rate per affiliate, you know, and then you can also increase your GMV per affiliate by layering in different hooks and selling points that we’re sourcing via AI and push those through levers, through gamification. That’s what’s going to increase sales in the long run. I think with these bigger brands right now, they’ve gotten to such a high place by sampling so high, but they have 10s of 1000s of creators who aren’t really moving the needle. I think the biggest thing is going to be re-engaging them through gamification to post three to five times. And then you’re going to see a huge halo, right, because you’re three to five, x-ing your entire brand awareness and you’re not paying until it happens.
Kevin King:
So why are some of these people, like you said 97% are not making it or making a dollar, or 92% you said 8%, 92% only make a buck or less as an affiliate. Is that because they have no reach? Is that because of the algorithm? They posted one video and the algorithm just didn’t give it any love and they’re like, oh, this doesn’t work, I’m going to move on to something else. Why is that? Or do they just create bad videos and they’re not good at sales or psychology? What makes a good creator be able to actually sell your product? They come from a sales background. Do they come from a psychology background? What is it that makes them a good creator?
Kevin King:
Yeah. So I think fundamentally with TikTok shop and social selling, what’s great about it is you’re able to get everyday people to promote your content, so it’s more authentic. But on the con side, they’re not professional creators. They might not know how to edit videos super well, they don’t have a decade of content creation experience doing paper post jobs for big brands, so their content creation skills as a whole are a bit lower. And then I see with these brands affiliate programs, like if you look at Bloom’s affiliate program, it’s actually not as consolidated to the top percentage of creators. There’s a more even spread, and what I hypothesize with that more even spread is the brand is doing a better job to educate the affiliates, right. So if you think about affiliates who don’t have a blueprint to create content from versus affiliates who have the you know, bloom starter package, where they’re able to see exactly what video blueprints have generated thousands of dollars last week and all they need to do is just copy that, I think that’s going to help creators do a bit better right, having some sort of starting point or basis, as opposed to just leaving it in the dark because these creators are newer.
Kevin King:
So you’re saying you should actually try to dictate what the creator does. If I’m brand new, and I’m and I just got 10 guys that said, okay, I’ll promote your product, send me a sample. Do I send them just a sample and say, all right, good luck. Or do I send them a copy of my Amazon listing? Or here’s the 10 bullet points that I want you to focus on, here’s a script, or what would I do?
Kevin King:
I would recommend sending something like this to creators, because if you think about the creative process, it’s very ambiguous. Like even if I said, hey, create a testimonial type content, for me that could mean 1000 different video variations and that’s analysis paralysis for the creator makes them not get started and they might not even post. So you do need to give them some sort of launching point. I would word it as inspiration rather than a requirement, like give them some ideas off of what’s worked well and then let them render or take that idea and do it in their own way.
Kevin King:
Do you see some sellers that want to approve everything, they want to micromanage everything on their brand, or do you see a lot of just let them do their thing, get the hell out of their way. Or you see a lot of brands that are super worried about oh, they’re going to misrepresent us or they’re going to bash us, or what if they don’t like my sample and they do a negative video on this? What are you seeing on that side?
Kevin King:
Yeah, I would say the sellers who are sorry, I would say the sellers who are super micromanaging brand conscious, those don’t do well on TikTok shop because TikTok doesn’t have a way embedded in the platform, to review and reject content before it’s actually diffused, right? And if someone sends like a really big, long list of requirements saying you can’t say this word, you know this is an FDA compliant, that’s stifling the creator sensitivity and that doesn’t tend to work well. But you still should be talking to the creator. People still want to feel like recognize. People still want to feel like there’s a good relationship with the brand there. So you should be talking to them.
Kevin King:
I that a mistake that a lot of people make is they assume that the video that’s made for YouTube, I can just lift that up and put that on TikTok and I can put that on Reels and I can put that on Meta and that’s usually not the case. What kind of tweaks or what kind besides dimension stuff, the basics, what kind of things do you see that are different between the platforms versus dealing with creators that are focused on different platforms?
Kevin King:
I think just to simplify it, let’s go like people who try to take Instagram to TikTok. I think like, since the aspect ratios and you know the formats between reels and videos are very similar, uh, there’s an easy uh pitfall to fall into, so on. On Instagram, I see the content being very millennial, coded, very aesthetic right. You’re like, especially like. Think about if you’re following a Pilates brand on Meta right, the entire profile page is very like. Use certain colors, have like very nice branding, make it look very pretty and aesthetic right. And when you try to take that content onto TikTok, the user is looking for something very relatable, very authentic, very raw and natural, and that curated aesthetic completely falls short. So when I see people try to repost all their Instagram content onto TikTok, it usually doesn’t work unless they’re already socially driven. On the flip side, if you take any of your TikTok creative and you cut it up and try to use it onto Meta ads or things like that, that really works well. We see a lot of our sellers actually trying to incubate and test TikTok videos to then use on meta as their creative. That’s a really common strategy for a lot of the people we work with, because TikTok creators are so much more creative and innovative and they’re not trying to follow this brand aesthetic or curate that millennial coded content.
Kevin King:
So what’s going to happen with TikTok? Where’s it going? Is it going to stick around? Who’s going to buy it? What’s going to happen? What’s the inside feeling at you? Because if it goes away, you could go away, or that’s why you’re going to Instagram. Like, okay, let’s hedge our bets here, but what’s your gut feeling on what’s going to happen?
Kevin King:
Yeah, I mean, we’re definitely close with a lot of people at TikTok and I’m a firm believer that anything in America that makes a lot of money is going to find a way to stay. And with TikTok pacing towards an 80 billion total addressable market, I don’t think anyone’s going to just take that money off the table. Wipe all these small businesses way of life. I don’t think it’s going to go away. You know, of course, like with a consumer sentiment, like people are a bit more apprehensive because, like, the government just keeps kicking this decision three months down the road, right, so we are expanding to Instagram and that’s, that’s one of our goals. Anyways, it’s not because of fear that TikTok is going to go away, so I firmly think it’s going to be here to stay. I think people may be nervous about it, but there’s too much money for it to really go away.
Kevin King:
So how do they find you on LinkedIn?
Kevin King:
Sohun Sanka. There isn’t that many Sohuns either, so, honestly, even off my first name here, you’d probably be able to find me. But that’s S-O-H-U-N-S-A-N-K-A.
Kevin King:
Awesome. Well, hey, I really appreciate you coming on today, Sohun, and speaking telling us about TikTok, yuka and stuff. There’s exciting times with social commerce. I think it’s going to be the, no matter what happens with TikTok. It’s the hot thing right now and it’s, I think, for discovery. It’s the new number one way for new product discovery out there, for new product discovery out there.
Kevin King:
Yeah, and thanks so much for having me on. It was great, great questions, and really appreciate you making the time.
Kevin King:
You can see from this discussion, social commerce is becoming a much bigger component of your total mix of what you gotta do to actually sell. When it comes to e-commerce Whether that’s on Amazon, Shopify, TikTok shop, Walmart social commerce especially TikTok is a major opportunity now. Hopefully you got some good insights and some ideas from this episode. That’s our goal here at the AM/PM podcast and you know, if you want more of this kind of stuff, make sure you subscribe to my newsletter. It’s billiondollarsellers.com. It’s totally free every Monday and Thursday, brand new, actionable tactical stuff, the latest tools, resources, news, what’s happening in the Amazon and e-commerce and especially the AI world. That’s affecting a lot of what we’re doing. See you again next week with another episode of the AM/PM podcast. Take care everybody.
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