When it comes to eCommerce in 2024 and beyond, both Amazon and TikTok Shop are powerful selling channels for businesses. Amazon is more established and trusted, existing for decades and targeting customers who have a clear purchase intent. TikTok Shop is a newer eCommerce space married to social media and is ideal for businesses looking to reach new (and potentially younger) customers. Should you use TikTok Shop and Amazon as a business today? Each channel offers certain features, benefits, and audiences that might align with your business strategy and goals. This blog discusses the key differences between selling on Amazon and TikTok Shop so that you make an informed decision on where to allocate your resources (from marketing spend to margin allowances) for maximum impact.
What is TikTok Shop?
You've heard of TikTok and seen a viral video or two, but TikTok Shop takes the platform a step further by integrating a shopping funnel through social media. TikTok Shop launched in September 2023, and allowed this already massive social platform to enter the burgeoning world of social commerce. By leveraging its massive user base and the engaging nature of its content to drive sales in a seemingly organic way, TikTok Shop represents a significant shift in how consumers discover and purchase products. TikTok Shop is the new frontier of eCommerce, and combines entertainment and shopping that aligns with the always-on habits of modern consumers. In terms of audience and reach, TikTok also represents a huge growing number of daily users who log on daily for tailored entertainment and social connection. Leveraging this for your business or brand could be ideal.
What is Amazon?
Amazon is an eCommerce channel originally founded in 1994. Initially an online bookstore, the platform is now a vast digital marketplace selling millions of products, from electronics and groceries to home goods and premium beauty products. Increasingly reliant on fast, efficient delivery and renowned for its customer service, Amazon is trusted by consumers all over the globe. Because it is relatively easy for businesses to join and sell on the platform and unlock the channel’s massive reach, it is now a crucial piece of many retailers’ eCommerce strategies.
Different Selling Structures, Different Discovery
TikTok Shop is linked to a business’ feed and primarily leverages existing platform features, such as live streams and product tags. TikTok takes users' activity and filters them to certain videos with a sophisticated interest-based algorithm. This seems organic to users and improves the more they use the platform. TikTok Shop drives discovery through content engagement, which means users find products they weren’t even seeking out.
Businesses can utilise TikTok’s structure to drive sales. For example, if an influencer tags products in their videos, it is a fairly cost-effective and seamless way to reach new customers. Fees currently in the UK are 5% with an initial 1.8% for 90 days. There are also fees for content generation via the creator marketplace, which come in a variety of packages.
TikTok Shop focuses more on content creation rather than looking or functioning like a storefront. Because of this structure, your reach may be even wider and could even have viral potential from the “I bought it on TikTok” crew. Examples include the Stanley tumbler, the Unbrush, or butt-lifting leggings.
On the Amazon side, most product discovery is done through search. Amazon also has a sophisticated algorithm, but rather than being creative-content driven, it’s based on purchase intent. Amazon specifically recommends products customers might be interested in and drives purchases even if a customer leaves the funnel (for example, through off-Amazon display ads, retargeting, or upselling features).
Amazon is clear about the fee structure for sellers, with different tiers and fees directly tied to account type, fulfillment type, and category. Professional Sellers on Amazon are charged a flat monthly fee in their locale and can incur storage and fulfillment fees, as well as per-item selling charges.
Marketing and Promotion
Both Amazon and TikTok Shop charge for marketing and various promotional activities. This includes paid advertisements of various types. Like any marketing budget, you’ll want to plan carefully and balance spend (which can be significant) between platforms and ad types while keeping your goals in mind.
On Amazon, sellers can use custom storefronts, Sponsored Products, Sponsored Brands, Display Ads, and promotions (like Black Friday Deals) to directly promote their products.
Though TikTok Shop is more of a community-based approach that relies on influencers, hashtags, trending sounds, and other features to amplify content (and in turn, products) there are still opportunities for paid marketing through LIVE Shopping Ads, Video Shopping Ads and promotional campaigns.
On top of paid ads and promotions, businesses should account for the marketing budget required for photography, design, video creation, etc. With Amazon, it pays to look professional and showcase your brand and products well. On TikTok Shop, whilst unpolished, genuine content performs well, it still requires a constant flow of newly created content.
Fulfillment, Logistics, and Setup
Amazon is known for reliable delivery speed and customer service. Sellers can unlock these benefits while using Amazon FBA. This program handles storage, picking, packing, shipping, and returns for sellers. While this comes with a fee, it ensures a seamless, trusted experience for customers.
Similar to FBA, TikTok Shop now offers an order fulfilment service in the UK known as Fulfilment by TikTok (FBT) whereby they handle the logistics on behalf of sellers. Sellers can also integrate their account with other payment and shopping platforms, such as PayPal, Shopify stores, and more.
Should I Sell on Amazon and TikTok Shop?
There is not a one-size-fits-all approach to eCommerce, so businesses must consider their goals and plans carefully before jumping onto Amazon or TikTok Shop. These days, customers almost expect brands to be omnichannel, but that doesn’t mean every platform will drive sales for your business equally. While Amazon offers trusted logistics and a vast purchase-intent-based algorithm, it can also come with a lot of fees and management that businesses might not be able to effectively manage. TikTok Shop, however, presents a new social commerce opportunity to engage with a younger audience through creative content. TikTok Shop is cheaper to test out and perfect for brands looking to build community and wade into influencer marketing.
Ultimately, businesses should decide what channel best serves their product and brand. It’s often not an either/or decision, but rather one that relies on testing, research, and optimizing marketing spend, visibility, and growth. If you need assistance with eCommerce platforms like Amazon or TikTok Shop, eCommerce Nurse is here to support your growing business. Contact us today.
