#385 – Is TikTok Shop The Next Big Thing? Insights From Paul Harvey

#385 - Is TikTok Shop The Next Big Thing? Insights From Paul Harvey Speaker 1: Welcome to episode 385 of the AM PM podcast. My guest this week is coming to us from across the pond in the UK, Paul Harvey. You know, right now a hot topic is TikTok. Should you or shouldn't you actually pay attention to what's going on with TikTok and TikTok shop. Paul Harvey is the expert. He's got a great newsletter all about TikTok for e-commerce sellers. He knows what's going on. He helps people launch on TikTok, whether it be TikTok shop to make actually sales through there or just to get massive, massive promotion for their Amazon stores and to launch products on Amazon. We're going to be talking about all that and more this week. Enjoy this episode with Mr. Paul Harvey. Unknown Speaker: Welcome to the AM PM podcast. Welcome to the AM PM podcast. We explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: Welcome Paul Harvey, how are you doing man, it's good to see you again. Speaker 2: Big thanks Kevin, all good on my side, how are things on your side? Speaker 1: Things on my side are good, everything's rocking at Helium 10, we've got a brand new edition of the Freedom Ticket coming out soon. We've got, everything's going good with the Helium 10 Elite, just opened up to everybody. Those of you listening, if you're not, h10.me forward slash elite, I know you've been a speaker in that before. I just opened that up to everybody, got busy with my billion-dollar seller summits, busy selling products, just no time to sleep. I don't know about you, but no time to sleep. Speaker 2: You know what? I started Amazon like 10 years ago. I'm still waiting to sleep. And 10 years in the Amazon world means you're old, you're ancient. Speaker 1: I know. Speaker 2: It's ridiculous. Time moves so quickly in the Amazon world. Speaker 1: Yeah, I feel sometimes I talk to people and they're like, you know, I started selling FBA in 2015. I've been selling on Amazon since 2001, but the FBA model 2015 and I talked to someone that started in 2019 or 2020, you know, they've already had a big exit or something. I'm like, man. What did I miss there? What did I screw up? I've been doing this 10 years, but no, I'm happy. I've made a lot of good money. I still sell, do a lot of good stuff, but I'm always happy for those people that come in and focus and just crush it. Speaker 2: I just miss the days of penny clicks on PPC. I remember I used to have a budget of $10 per day. It would never get used up. And that's just because PPC back in the day, yeah, no one did it. I miss those days. Speaker 1: I remember when PPC first came about in the internet before Amazon, there was a company called Goto, G-O-T-O, goto.com that came out. This must have been maybe late 90s, early 2000s, somewhere around there. They came out and they started as a paper click model and they would, I forget exactly how it actually worked. It tagged onto the Yahoo or tagged onto your site or something. I forget exactly how it worked, but bids on it were initially a penny, literally one cent. And they got so upset that everybody just bidding one cent, they actually raised it to two cents as a minimum bid. And then Google ended up buying them and incorporating that technology and exploding it into what they do. But yeah, it was called goto.com and I remember that it's been a big day, a big promotion. We'd be like $8 or $10 or something like that one day and I'd be like, man, I'm making so much money. Only cost me $10 to advertise. Yeah, those days are definitely gone. But now we have a new game in town. We're going to talk about that social media and there's ways to leverage social media to actually get, in essence, in some cases, free clicks or free publicity that you couldn't have gotten back then. So you started out, just to give everybody a background a little bit about you, you started out as a seller, right? Speaker 2: Yeah. Yeah, originally I started with ASM1. And if you know what ASM is, you've been in the game for way too long. But yeah, I started then and basically I've- That's been like 2012, 2013 or so. Yeah, exactly. My daughter's now coming up on 10 and I started the course when she was born. So yeah, I used that because I look around and say like, wow, you're old. That's how long I've been on Amazon. So yeah. So ideally, like with me, I've worn pretty much every Amazon hat there is. I've been a seller, consultant, run agencies. I worked in aggregators, pretty much everything. The way I think of it is 10 years in Amazon and just pretty much everyone knows the experience level. You just do everything because you have to. Speaker 1: Yeah, exactly. And then you evolved out of that. You were selling and then did you have an exit or did you just migrate into something else? Speaker 2: What happened was I launched my own chatbot with my company, everything, and then it was a chatbot of a messenger. And then literally overnight, Facebook turned us off. And like if you want to see a business fail quickly overnight, that's exactly how it happened. And so Facebook just turned us off. And then we changed a few things. But then during the aggregator model, when it was really blowing up, a lot of my clients were being bought up by an aggregator. So the aggregator then said to me, Paul, come to us, join us as one of the founding members. I was like, cool, I'll do that. But I had to sacrifice everything, like everything, like all my accounts, my agencies, everything, software, everything we had to cut off to join them. So I did because the aim was I joined the low salary but high equity And if they went public, that would be my big day. That really would be. And this is a time when everyone thought every aggregator would make it. And then I joined there as the first few employees and it scaled to 120 employees in six months. However, I was the only person that had any actual Amazon experience. I even created a course to teach people how to do their job because no one knew what to do. Being an Amazon seller, much like yourself, we can do everything. That's not a brag, but we have to do everything. I was doing PPC for one brand, logistics for the other, listing optimization for one, external traffic for the other. I was doing everything. We could because we're sellers, but for a new person, they don't know what they were doing. Fortunately, that aggregator closed down a few months afterwards, but they did one thing really well and one thing I really, really appreciate them for. They purchased a software that would measure the verticals across all their brands. And the software was so expensive, they wouldn't tell me how much I paid for it because, and they were friends of mine, but they were just too embarrassed to say how much it cost. But essentially the software would measure every vertical. So if there was a sales increase, You would see an increase on Amazon or Walmart or social signals, whatever, and we'll tell you why this is happening. It was great. It really was. It was really great software. However, every time I ran a TikTok ad campaign, we would see a minor spark, a minor increase in sales on the main platforms like Amazon and Walmart and so on and so forth. However, the software could never knew why and then I cannot tell us why there was a sales increase, but every time it happened because of TikTok, we're running some campaigns and so on and so forth. And me being an Amazon seller, I said, guys, this is because of TikTok. Drop everything and go all in on TikTok. And they said, no, Paul, the software doesn't tell us. But being an Amazon seller, You know better than most. So if you see something working, you say, okay, it's because of this. And there may not be any proof, but you know, like a seller knows. And what I did was I argued with them back and forth for quite a long time and then actually left the company. Just to start up my own TikTok agency for Amazon sellers and went really well. The problem was at this agency purely to rub salt in their wounds, say I'm right, you're wrong. However, by the time I could prove them I was right, they were no longer around. And they played the whole aggregator model where they got absorbed by others and so on and so forth. So now, it's not as rewarding because I don't have anyone to rub salt in their wounds. I've known to say, I'm right, you're wrong, and yeah. Speaker 1: But essentially from that- Was it a US aggregator or a European-based aggregator? Speaker 2: It was a European one. Speaker 1: Okay. Speaker 2: Well, I say European, but I don't know where their offices mainly were because they were all over the place. But as far as I know, their main offices were European and yeah. They were one of the first aggregators to kind of get absorbed. And when I left there, I then started working with other aggregators. And what I realized was that first aggregator wasn't bad. They were better than most. And it just shows the aggregator space how much help they needed because a lot of these aggregators just didn't have the manpower to make it work. They didn't have the experience to work. And I mean, you know better than me, but yeah, we kind of saw that coming. Speaker 1: So you've been involved in TikTok then since the early days. I mean, I remember TikTok, was it originally called Musical.ly or something like that? And I remember Gary V was talking about this thing. This is like, I don't know, seven, eight years ago or something, this thing Musical.ly that's just going to take off. And then it ended up of, I don't know if it got bought out or they changed the name. I'm not sure exactly how that works, but I remember- They changed the name. Yeah, they changed the name and then around 20, because I think I first stumbled on it around 2018, 2019. It wasn't Amazon events. I think one of these other 10X events or something like that. And we went over there and there's a couple people said, Hey, Kevin, have you seen this TikTok? I'm like, what the heck? I never heard of this. What are you talking about? They're like, Oh, it's gonna be the next big thing. This is 2018 2019. So I downloaded it and start playing with like, like, this is pretty addictive. This is actually pretty cool. So I've been playing on TikTok, you know, since the early days, I guess you could say, of TikTok, and I've seen it evolve. And there's, I know there's a, that's what you specialize in. There's a lot of opportunity now. We've got people that are on the billion dollar seller summit that talked about going from zero to $5 million in 10 months, just on TikTok. There's a whole ecosystem evolving, coming up around it with, you know, tools like helium 10, but for TikTok, so you can analyze stuff. But there's also a school of thought of people. Saying that you know, there's one person in this in our industry that has a newsletter that says you're wasting your time if you do TikTok, that the government's going to shut it down, that this is not going to exist. And don't don't don't spend a second of your time on TikTok. You're you're basically, it's not smart is what he's saying to do that focus on Amazon and blow off TikTok. It's not going to be around in a year anyway. What are your thoughts on that, you know, with the governments and stuff with it being Chinese and all that? Speaker 2: So like the first thing is that the way I view TikTok is much like a Chinese hijacker. You won't get rid of them. You really won't. And like, if we look at TikTok. Speaker 1: I love that. That's great. That's great. Speaker 2: It's true though, because if we look at TikTok, Santa's tried, EU has tried, and they've all failed. If you waited in the past, you're now behind. The way I look at things is that, okay, let's say TikTok crashes. Okay, so it crashes. We learned that. When I ran a Facebook Messenger chatbot, Facebook turned off the software overnight and we lost the whole business, but at least we tried. The same with TikTok. It's great, but it's like a Chinese hijacker. As soon as you take one off, there'll be another one over and over again. That's the same with TikTok. Santa's tried. EU has tried and come back stronger every time. So I'm betting on the resilience of the Chinese because we know they effectively can scale much faster than us. And then I feel far smarter than myself and pretty much anyone that's not in the East. Speaker 1: There's a lot of people that say, what's it even matter? Let's make hay while the sun shines. Even if something does go down a couple of years from now or a year from now or whatever, at least I got in there and I made a few million bucks or something. Still, Amazon's gonna be your steady horse maybe, but there's tons of, TikTok right now is a big wide ocean. And I think every Amazon seller, in my opinion, I think Amazon, TikTok is gonna be number two to Amazon. I don't think it's going anywhere. There's going to be some more media talk, but if TikTok, they'll, like you said, they're a hijacker, they'll come back another way. Maybe they got to change the name and they got to sell to, and there's some agreement where you got to be X amount US owned more than they are now. There'll be something, but it's not, I don't think it's going away. And I think it's going to continue. And I think it's going to be the second biggest marketplace ahead of Walmart at some point, especially once they get their fulfillments distribution centers in. Where I think they could have a problem though is now there's so many people going on to TikTok actually and the feeds are getting corrupted. So it used to be that go on, I want to be entertained. I just want to watch a bunch of people dance or see some jokes or whatever. And now it's like every other video is an influencer or UGC or an ad. And TikTok's got to get a handle on that, I think, to find that right balance or they're going to turn some people off. What are your thoughts on how it's evolving right now in that regard? Speaker 2: So if we look at TikTok, what I love about them, the USP has always been about a really, really addictive newsfeed. That's their USP. However, now with them just testing out shoppable posts and kind of flooding the system with TikTok shop content, they're kind of killing their own addictive algorithm. So like what I do foresee is that they're aware of this and they're right now they're just testing multiple things at once to see what works, what doesn't work. And as soon as they know what works, they'll just scale down. Like what's crazy is I know a bunch of Chinese sellers. I just do Amazon and TikTok shop and they crush it. They do like a few hundred thousand dollars in sales on TikTok shop when they do a live per day. And it's purely because, yeah, per day. And it's just crazy. And when they tell me this, I'm like, wow, that's really, really scary because they've done this. And when you see that content, it's just horrible. It's one person staying in front of a camera saying, buy this, and then move on to the next item, buy this. They're not trying to sell to you, but people like that. And I see that just growing, growing, growing. And effectively, whatever they're learning in the East is coming over to the West, and they will optimize it for the West and go from there. Speaker 1: I mean, I saw that TikTok has like a $4 billion budget for this year, a promotional budget. You know, and last fall they were trying to compete and they were doing basically, I don't know if it's still going on right now to the same extent, but I know there's basically almost 0% fees. I know they're raising that up in tranches here. Then they're reimbursing you if you were giving a discount, you know, 50% off to buy my makeup mirror. They were reimbursing the seller for that. Plus they're reimbursing them for shipping where you can actually make money on the shipping reimbursement, I think, if I recall correctly. Is that still going on or is that starting to, those kind of promotions still going on to attract sellers or have they gotten enough in where they're backing off on some of that? Speaker 2: Yeah, they're kind of backing off, I've noticed. They're not as aggressive as they once were. But also one thing I did notice is that over the past year, I've been following on TikTok with their hiring trends and they are hiring the world's best engineers for e-commerce. And that hasn't slowed down. I like that because if you know what they're building, if you know the background, it works really well. And that's what I like about TikTok because they're hiring the best people to figure out what works and what doesn't work. Whereas most agencies, like I recently spoke to a client, they're saying to me, but Paul, I'm on Walmart. It's taken me months to actually launch on Walmart and get a few sales. And with TikTok Shop, they're getting sales within like a week. It really is that simple. And that's what I like about TikTok. It just moves very, very quickly. Whereas Walmart being based in the West, they're still learning and they're still trying to figure everything. And here's TikTok just come in and immediately in the first week or a few days, you're making sales at the gate. Speaker 1: I mean, TikTok overall, I think I saw some statistic that their sales last year were $17 billion, I think. And then this year, they're trying to to what was it hit 30 billion or I forget the exact number right now. But, but, and, and let's put that in perspective, though, that's a lot of money. I mean, $17 billion in sales is a lot of money. But that's a weekend for Amazon. And so but you know, that's that's that's a good weekend over Cyber Monday, Black Friday, Cyber Monday for Amazon, they do more than that. So to put that in perspective, TikTok is still a little fly a little fly when it compared to Amazon, but the Opportunities and the growth potential are immense. And it's kind of like the guys that got in, you know, that you did ASM one, you said those guys that started ASM one 2013. We're selling their company to these aggregators in 2018, 2019, 2020 for crazy money. And they got in at the right time where all they had to do was stick their name on it, find something on Alibaba and stick their logo on it. And that was it. And just put it up and then go to the beach. And a lot of those guys, this is the problem with the aggregators you were talking about. Nobody knew what they were doing. They would buy these companies that started in 2013, 2014 where people were right place, right time. And they would try to hire some of them and they would figure out these people actually don't know what they're doing. And some of these guys that sold for millions of bucks to an aggregator, they went out and said, well, I'll just do this again. They try to start another Amazon business and they fail miserably because they have no clue what they're doing. So it's kind of like right now in a way is TikTok is that same place. It's like that blue ocean, like get in there and there's not a lot of competition. Is there competition coming? Absolutely. There's more and more every day, but get in there now. But a lot of people are saying, man, it's difficult. You know, I have to, what are some of the rules? I have to be a US citizen. I live in Canada. I live in Europe and I'm selling on Amazon. But TikTok won't let me in. I have to be what UK citizen or US citizen or US business, UK business. I can't even be Canadian. Then some people are saying, man, the process is arduous to sign up, you know. And other people say, no, if you just go through Shopify, I think maybe you posted this in your newsletter or something. I don't remember what I saw. If you go through Shopify and get approved that way, you can get instantly approved on TikTok. But what are some of the The roadblocks right now to getting up and some of the requirements. Speaker 2: The first thing is everyone asks me, Paul, why aren't you on TikTok Shop? Why do you run an agency? Why don't you sell there? Because you're on Amazon. I'm like, listen to the accent. This is why I'm not on TikTok Shop. Purely because you need to be a U.S. citizen. Speaker 1: I have a bunch of- And you're a citizen, just to clarify, of South Africa. Speaker 2: Oh, yeah. There we go. So you need to be a US citizen and when you submit your documents, what I've noticed is I've been to a lot of clients like this and you need to submit your documents and then your passport and your driver's license. However, you just need to submit your driver's license and passport to show that you're in the US. The driver's license and passport that you submit doesn't have to be related to the company. So a lot of users what I found doing is they have a US entity. But then they hire someone to just be the face, just their name and their details to get access to TikTok Shop. So much so that now if you go into a lot of these TikTok Shop Facebook groups, people are selling their driver's license and details so that you can use it to get access to TikTok Shop. Yeah, it's a huge thing. Like back in the day, selling Amazon accounts was like a thing. People used to do it. And now it's the same thing with TikTok Shop. Speaker 1: It's still a thing now. It's still a thing. I just recently sold Old Amazon account hadn't used in years for 14 grand. Speaker 2: Could you get same day reimbursements on that one? Speaker 1: No, I have one that you can, that I'm holding on to, but I was offered a lot of money for that one. It's an old one. But the ones I sold were from 2019, 2020. They had some good feedbacks and stuff. And I have another one. I have a vendor account that's going to go for a significant five figures. We're just betting a few things on it right now. But yeah, there's a whole business around that. Yes, it still exists. So if I'm living in South Africa and I'm selling on Amazon or whatever, I want to get on TikTok Shop in the US, I just need to partner up with somebody that's American basically. It has an LLC and I could be a partner in that company or I can own 99% of it and they own 1% or whatever. What about the Chinese? Do they have to do the same thing or they have a special agreement that if you're Chinese that you can sell on TikTok? Speaker 2: So from what I've noticed that the person's details you use to access to show that you're a US citizen doesn't actually need to be affiliated to the business. What I've seen some clients do is they have the US entity, LLC, all that stuff, and then their wife is like American. So they use their wife just as the placeholder to get into the shop. Even though there's no tax implications, everything, that's just access. So I assume that's what most people are doing. One thing I should say is literally don't take my advice on tax. This is purely assumption. So I always say that because I don't know. And literally right now TikTok Shop is very much like Amazon from back in the day. It's very easy to get in and I say easy to get in. However, 10% of the new accounts that were created for TikTok Shop are rejected. I had one client, they do 20 million per year on Amazon and TikTok has been courting them, asking them to open a TikTok shop accounts. But every time they do, they get denied access. And the reason being is that TikTok purely doesn't like their passport details. That's the reason. TikTok actually said back to them, sorry, we can't accept you because the system doesn't like you. And they are their own problem sometimes. Speaker 1: What about this? Is it, is it, there's some sort of Shopify workaround where if you have a Shopify plugin or something, uh, I've heard something about that where it actually, you can just hit a button and it automatically approves you into the shop or something. There's some like backdoor workaround. Speaker 2: There is a backdoor workaround like that where you can use Shopify to get access to TikTok shop. However, it's, it's, it's backdoor access with limited access. So I've noticed sometimes is that when the seller goes through what goes to Shopify, it's great. But then things like opening up an ad account or adding users to the account or the normal mundane stuff, they can't do and then actually have to go through the normal route to actually open the account. But what I've noticed is with every brand, it's kind of like what works for that brand may work for that brand but may not work for other brand. So it's a very much an individualized approach to see to kind of like get access as quickly as possible. Speaker 1: I know TikTok, they don't have their own fulfillment network yet. They have partnership agreements with some people, but their long-term goal is to basically build their own fulfillment network with warehouses just like Amazon, like FBA. I think when they do that, that's going to be another game changer, but that's probably a little ways off where that really gets up and going. They might start dabbling in it soon. Speaker 2: FBT, Fulfilled By TikTok, is open right now for some brands. However, I want everyone don't use it because it's like a TikTok's beta or beta program, which means there's going to be problems. And what will probably happen is if you keep stock in their warehouse and they ship it out late, That comes on your record. It'll probably go off your record and then it shows that you are a bad seller because your shipping rates are really bad, even though it went through TikTok. And I say this because TikTok doesn't know the problems they're going to face yet. So rather hold back on doing for thought by TikTok for as long as possible until the guinea pigs have tested it. And don't be a guinea pig because they can come back and bite you. Speaker 1: Cause like you said, TikTok is really anal on the shipping, right? You got to ship within two days or something like that, or they penalize the heck out of you. There's like, there's no margin of error, right? They, they, cause they want customers, they know they're launching. They can't screw up or people are like, ah, it took me forever to get my stuff. You know, and it changes their reputation of the whole shop. So what are the rules when it comes to shipping out of TikTok? Speaker 2: So basically, once you can order on TikTok Shop, you have three days to get the product to the customer. That's it. Speaker 1: Three days to actually be delivered, not to ship, but delivered? Speaker 2: It depends. Ideally, I tell everyone three days till it arrives at their door. The reason I say that is because it's normally three days to be delivered. But they're changing things. Like for example, you mentioned earlier about TikTok is increasing their commission rate. It was 3%, now it's 7%, which still it's a fraction compared to Amazon. But from 3% to 7%, that's like double. So bear that in mind. So a few things people need to be aware of. The shipping times may change drastically. So I say to everyone, three days to get there. That's a safe thing to bet on. Speaker 1: I've ordered quite a few things on TikTok. Some of them have taken a couple of weeks. Some of them, I just ordered something last weekend. It got here yesterday. So that would be like four or five days delivery. I mean, I got a shipment notice within a day or two. I don't think I've ever gotten anything in three days actually delivered. I've probably ordered seven or eight things off of TikTok. Some of it's drop shipped out of China and some of it looks like it's shipped from here. The other beautiful thing about on TikTok is you get the customer data, right? It's not like Amazon. Speaker 2: You get the customer data, but you get their name and phone number, but not their email address. Speaker 1: But you get their physical address. Speaker 2: Yes. Yeah, you do. Yeah. Speaker 1: Okay. So you could, you can download that and you could, you know, if you want to get an email address, but you could use software companies out there to build a list off of that. There's, you know, like Melissa data or some of those that will take physical addresses and match them and email. Speaker 2: And right now that's not against the rules. It might be in the future. But right now it works. Much like Amazon back in the day before they said, don't do rebates, you could do rebates. It's the same thing now with TikTok is that what's happening now is that the strategies right now might be against the rules in the future. So do everything you can right now. Speaker 1: Yeah, so what what are the categories that are working really well on TikTok? I mean, can I sell automotive tires if I'm an automotive or something? Or is it more the gadgets and the beauty What are some of the key categories that just always do well on TikTok Shop? What are some that just don't do so good? Speaker 2: The main thing I'm seeing is fashion. Fashion just crushes it. So much so that I have one brand, when we start running their ads, they get a 20X ROI on their ads alone. They are crushing. They really are. Even if we don't run ads, they still get a lot of sales organically. And that's great. And that's one particular niche, which isn't the same for everyone. So I say this because it works great for them, but not for other brands. Right now, we have about 15 brands right now that we have on TikTok Shop. And some of them are great, some of them are poor. But the main thing is that how much of an impulse buy is your product? That's the main thing. If it's impulse buy, then do it right now. And impulse buy anything below like $30, I'm seeing the best sweet spot. We sell some products that are over $100 and they do really well. It's just not as well as the lower products. But one thing I'm seeing ridiculous success with is growing love. I just noticed that a bunch of brands are a feature. They have some really boring products and them as themselves as a person, as a presenter, as a host is really, really boring, like really boring. However, they get such great reach when you go live. Even if a live doesn't work, you just get a lot of great reach out of that. What's great about that is two aspects. You can actually boost lives using TikTok ads. So that way your lives get more reach. And secondly is that anyone that watches your live or clicks on your live, after you boost it, you can retarget them. So a lot of TikTok users think my products are going viral only because I've retargeted them over and over again with different pieces of videos, same product, different videos. So then they see at least 10 to 15 creators talking about the same product. In their minds, it looks like it's going viral because they're being retargeted so much. And that works really, really well as a result. Speaker 1: I remember you talked about something similar to that in your newsletter. You have a newsletter for TikTok for e-commerce sellers or for Amazon sellers, basically, that you put out. I think a new one comes out, what, every week? Speaker 2: In a few hours today, yeah. Speaker 1: I remember one of those a while back, you actually had some strategy there I thought was pretty cool, where you actually say go out and get some content creators to do your product for you, you know, some UGC, and then have them post the video. And some of those may go viral. Some of those may only have 100 views or something, you know, something small, but then run ads, take those 10 or 15 people. Run ads on their videos to a very and run all the ads to the same like 5,000 people audience or something like a small a very small audience of like 5,000 people and it's the same people that you're targeting with each one of those ads basically and then what starts happening is they start seeing it in Come up all from all these different influencers and they think like you just said They think oh, this must be this is I'm seeing this over and over everybody must be talking about this I mean you pay attention And that can then cause those other videos, the natural organic ones to start getting more and more organic plays into hopefully a couple of them go viral and explode. That was a pretty brilliant strategy I thought that you shared there. Actually, a way to actually force that, almost force that virality. Speaker 2: And the reason I love that strategy is because it just shows that a lot of TikTok users are Gen Z and everything. And Gen Z people do not like clicking on ads. They really don't. They really don't. They don't click on ads. But they will search on Amazon by default. So what I noticed was is that first of all, if they see your product being featured on TikTok just by an ad or by influencer, whichever, they see it, they probably will forget about it. But then if they see it again by another person talking about it, their interest is piqued third time over. And every time you retarget them, it really, really works because they think that this product, everyone's talking about it. So all we really do is retarget that same person over and over again with different pieces of content. And then what happens is the user may still not click on the ad because they don't like ads, but they will go search on Amazon by default. So one thing we do really, really well is we tell them how to find it on Amazon. So we say to them, okay, the one common thing in all those videos is when we give them instructions, And the instructions are, go find on Amazon, just search brand name keyword. That's it. That's the one common line in all those videos, search brand name keyword. Because what happens then, that they may not click on the ad, but they will go to Amazon and search by default. But how are they going to search for your product? You told them, brand name keyword. So for example, I use like baby grow baby blankets. The reason I use the brand name is because that way your product, your brand will appear in the search results. And it works really well to a point where we've been able to manipulate the search or the brand analytics and the search volume for that brand and that keyword Before we run TikTok ads, you may not even see the brand name or the keyword referenced on brand analytics. But then after running these campaigns for a few weeks, people come to Amazon and they search for the brand and they do exactly how you instructed them, search brand name, keyword. And then we see anywhere from about, from zero keywords to about 10 to 15 keywords then referenced on brand analytics as a result. Speaker 1: I used to, you could run, you could put links to Amazon storefronts, but now TikTok really doesn't like that. Or did they actually ban that? Or did they just, they frown on that and they penalize you for it? Speaker 2: So what happened was, this is like the rumor mold. It started up a while ago. They say that Sorry, TikTok does not like Amazon references. And they may be true, may not be true. But the main thing is though is that the articles were saying, you can't run a TikTok ads to Amazon. And that's like saying you can't run Facebook ads that go to TikTok. You can. Facebook will never turn down your money. TikTok will never turn down your money. The only cost is maybe by pushing traffic to Amazon, the costs are a little bit more, but I haven't seen much. So I only run TikTok ads to Amazon when not doing TikTok shop. And the CPCs are pretty much the same. As long as you have great content, the CPCs can be ignored. And we get CPCs about 10 cents. And we have for the past, I would say a year, year and a half, all depends on creating great content. Not so much the product, creating great content. You'll get great CPCs. Speaker 1: So, to make sure I understand, so if someone's going to go out, if I'm going to launch on TikTok and I get into the TikTok shop with my products, then what you recommend is go to an influencer and say, hey, feature my product and I want you to say, you know, somewhere in there say, you can get this on Amazon, search the brand name keyword or you can buy it here in TikTok shop. And so that gives them the choice of maybe they preferred Amazon because they trust Amazon, their credit cards already in there or whatever. So it gives them the choice. They can click the link below to go to buy it and shop or they can go search, find it on Amazon. And I know a lot of people are saying that, you know, when this is done right, they're getting a big lift, like you said, on Amazon as they're making some money off of TikTok because people just buy it right there. But they're also seeing big lifts and helping them with their launch and helping them with ranking and sales on Amazon too. Speaker 2: Yeah, a lot of users don't trust TikTok Shop, but they do trust Amazon. So I have a few brands that we spend like a few hundred dollars a day on ads on TikTok shop and they've not made any sales at all. But the caveat is their search analytics, their sales on Amazon have improved as a result of the TikTok shop ads. Because right now TikTok is great for brand awareness. It really is. And people don't trust, well, some users don't trust TikTok shops. They won't buy on TikTok shop. But they will go search for your product on Amazon and then do a price difference, the price discrepancy. When can I get the product on Amazon? And I trust Amazon more as opposed to TikTok Shop. And it's different for every product, every niche. Speaker 1: So if you're saying that in the video, having the content creator say that to go search for it on Amazon, are you doing anything with coupons? Because that would be a direct way to track it. So if you tell them, Go search for a brand name keyword on Amazon and to get 20% off, enter code TK02. And then you would know that exactly that sale specifically, not everybody's gonna type in the code because they'll forget it or whatever, but enough of them will where you'll at least get a baseline idea of these were, this order came from TikTok. You just look at how many of those codes are redeemed. Is anybody doing or any of your clients doing something like that? Speaker 2: Absolutely no one, and I've tried that a lot. The problem is, is TikTok users are lazy, like lazy, so, so damn lazy. If you give them instructions, I can pretty much guarantee no one will follow it. What we've done, we split test the difference between sending traffic to an Amazon listing versus a storefront. And what we came to realize is that if we send to the storefront, that means they have to read. They have to go through the products of your storefronts and figure out which is the one in the video they just watched. And that sounds ridiculous, but it's true. When you send traffic to the storefront, it doesn't work because it's one extra click to get to the Amazon listing and they don't want to click that. They really don't. So I just find the best results being as simple as possible. For example, we reach out to about three to 400 affiliates on the TikTok shop database every week, every brand. But what we noticed was we split test the message when we sent out to them. We said to them, first of all, we said, Hey, you're amazing. We love this video you did. Would you mind doing a video for us? We'll be boosting it with ads so you get more sales, more stuff. So we had like a nice little writer telling them how to win for them to work with us. And that went absolutely nowhere, like nowhere. We tried personalization, everything. At the end of it, Three lines is the optimized length. We say to them, Hey, you're great. We want to work with you. Here's the product. Let me know. That's it. And that has been the most effective way of contacting affiliates because they get about 40 to 50 people reaching out to them per day. And they don't care about your sob story. They don't care anything about your brand. They just want to see how would this make them more money or just make them look cooler than everyone else. Speaker 1: You set the affiliate rate too, right? You set their commission rate. Yeah. So if you're doing a big launch, you can make it some really high affiliate rate just to get them on board, even though you might be breaking even or losing money, but it can help on a launch. And then dial that back over time, right? Speaker 2: Exactly that. The only issue is I've experimented and like for me, what I've noticed is the best commission rate is 20%. I'll just make it 20% and leave it at that. And I've been really aggressive and made like 50, 60, 70% done testing around that. The issue is you can see a business model, but they can't. They really can't. You have to tell them, you're going to make 60, 70% commission. It's in your best interest to do this. And you would think by increasing the commission, it gets the interest. It doesn't. However, as soon as the users can see that you're making sales on TikTok Shop, then they're more likely to endorse your product. So by just sending them a link to a product, to a storefront, the first thing they look at is how many sales has this brand made. If you haven't made any sales, it doesn't matter what your commission rate is because they won't promote it because they can't see a way of making quick sales or quick buy. Speaker 1: How do you get around that if you're brand new? Speaker 2: So pretty much the only way to get around it is just Be relentless. Contact as many people as possible. You could even make your price much, much lower and then push stuff. The main thing about TikTok is that there are two traffic signals in TikTok, the organic growth and the ads. And I would say across the brands I work with, 80% of the traffic that comes to their storefronts on TikTok is all ads. Very, very few make any sales organically. Because right now TikTok is trying to work out how TikTok search works. And they just recently released some information on the TikTok shop showing the search. For the products, but the search has absolutely nothing to do with the product. I saw the other day a fitness product and the keyword was kitchen products. Like someone searched kitchen products and TikTok offered up this fitness product and they bought. So like TikTok is still trying to figure out all the search results and so on and so forth. So it's getting there, but not anytime soon. Speaker 1: How do you find these content? You said you're reaching out to 300, 400 a day. How are you finding them? What's the process actually? Is there agencies that have these databases of them or are you just having to go hunt and pack and find them or how are you finding them? Speaker 2: There's two ways of doing it. First of all, you get the TikTok affiliates on the TikTok Shop platform. You can contact them in mass on there. The only issue is that As you can only DM them and these affiliates can only be contacted through that platform. So you can't contact them anywhere else. And that's your own way. So what my team does, first thing we do is contact as many as possible that will be related to the niche of the product, contact as many as possible. And normally we get a lot of free content out of that. The problem is the free content is just horrible, like really, really horrible. Like so horrible in fact that I feel the need to apologize to the clients every time because the content is so bad. But sometimes The worse off it is, the better it is. And right now, TikTok is about quantity, not quality. And it's hard for Amazon seller because we're used to quality being the main thing. Like try sell on Amazon with unoptimized images of your product. Not going to happen. With TikTok Shop, it still can work. You can still do really well having an unoptimized I'm content and stuff purely because quantity beats quality every single time. So the main thing is contact as many people as possible. And what we do, we contact everyone to get free content and then we say, great, that was the free content. Now let's do paid. We're going to pay people to create content and then we compare everything back and forth. And as a result, we launch, I would say about at least five videos per week, every week. And the rule is five videos. And the reason we do five videos is because let's say you have 20 videos. You launch 20 videos in your ad campaign. The problem is the way the TikTok algorithm, the ad algorithm works is that of those 20 videos, normally one or two videos will take the lion's share of the budget, which means there'll be 18 videos that haven't properly been tested. So I take five videos because of those five videos, one or two will be the winners and the others will still get some love. So you know what's the best video. So every week we run five videos and then we take the winning one from that. And then the following week, another five videos and take the winner from that until you have five winners. And once you get those five winners, you put them together to see who is the better product, sorry, who is the better video. And then once you have that ultimate winner, that's the guideline, that's the showcase for the brand. Because now you know what works. So now, once I have that proven, we go to all those affiliate creators and say to them, great, we want you to create content like this. Because we're going to be boosting your content with ads. So you get more commission, more followers, um, and we get more sales. So it's a one, one situation. We know what works. This strategy works with this content works. Make your, please put a spot on this and like, and then, and then you know what works and what doesn't work. And then the idea is, and this is an ongoing process where you continually get new videos all the time and just pretty much testing everything throughout. Speaker 1: How does the ad platform work? Is it similar to Facebook or Amazon where you can target certain segments or you can target certain people and you set your own bids? What's the general overview of how that platform works? Speaker 2: It's very much very similar to Facebook but nowhere near as advanced. You could spend a day or two on the TikTok algorithm or TikTok ad platform and pretty much master it in a few days because it really is playing catch up. But essentially what you do is you target people based on their interest. So let's say you're doing a baby blanket, you would target like newborns or parents of newborns, like mom talk, like mommy talk, like TikTok. So anything related to kids would do well. And then all you do then is you put the budget in, your budget, like $50 per day, and then let it go. What's interesting is sometimes, actually most of the time, I don't do any interest-based targeting. I just let TikTok do the targeting for me. So I don't put any restrictions, I say, for me. And normally, I get the best results like that as opposed to doing interest-based targeting. Speaker 1: And you're getting, you said, on average, about 10 cents or less per click. Speaker 2: Yeah. What's interesting, 10 cents per click going to Amazon, but about $2 sometimes when you go to TikTok Shop, which is weird. Speaker 1: Oh, really? Speaker 2: Yeah. And I'm still trying to figure this out. I assume, first of all, is that if they see it's an Amazon product, they trust Amazon. So it's cheap clicks, cheap high quality clicks. But it goes to TikTok Shop, they might not then be keen. And I'm still trying to figure out also the main issue I'm seeing is that TikTok Shop, I don't trust their metrics. Like when you run ads, I still don't trust their metrics. So maybe they're still trying to figure out a few things to go from there. Speaker 1: So where do you think TikTok is going? What do you want? Why should people listening right now? Seriously, if they're not on TikTok, seriously be considering what are like the three big things that like what you're saying like, oh my gosh, if you're not doing this, this, you're missing out on these things. Why should people really pay attention, sit up and try to get on TikTok? Speaker 2: The main reason people should look at this is that TikTok right now is very focused on the creators. They're very focused on the influencers and it's the only platform where it's a one-to-one situation, a one for the seller and a one for the affiliate. So right now if you look at Amazon, I think what's the standard affiliate rate percentage there? I think it's about 5% or 10%. I could be wrong. But what's really great about TikTok Shop essentially is that if you get content, the affiliate gets their money up front or the money from every single sale and then you get more sales as a result. So it's a one-on-one situation. You help them get more sales or you help them get more commission, you get more sales. And it's nice because there's no barrier to entry. Whereas with Amazon Associates, there is, you need to have something like a few hundred thousand followers on Instagram and so on and so forth. Whereas with TikTok, it just really works well. So the aim is right now, let's assume you have 15 influencers. I use that term very loosely, like anyone can come be an influencer on TikTok. So let's say you have 15 influencers that all talk about your product. Now, you can simultaneously boost all 15 pieces of content. And why this is so good is because you're not boosting a video about your product. You're boosting a video, an influencer's video. So it comes up to the user. They see it on their newsfeed. It looks like an influencer just recommending your product and doesn't come across as an ad. That's why it's so effective. So you have 15 videos just talking about your product and you boost them all. That works really, really well because a lot of the brands I work with don't even have a TikTok profile for their brand, but they have over a hundred influencers talking about their product. What's more effective? Those people are having their own branded accounts. The brand account is pretty useless if you have a lot of people talking about the products and then pushing the traffic from there. Speaker 1: So how do people get your newsletter if they want to learn more and keep up with the latest of what's going on and the latest strategies on when it comes to TikTok for e-commerce? How do they get the newsletter? Speaker 2: Best thing to do, go to rankster.co and newsletter there. Just put your email address and every week we send you updates and stuff and go from there. Speaker 1: And if they want to reach out to you as an agency or want you to help them get set up and run some of their ads and stuff for them, how do they do that? Speaker 2: Yeah, so on the site, rankster.co, once a sign up or their links there to contact me directly or member of my team. Speaker 1: So that's rankster.co, right? Speaker 2: Yeah. Speaker 1: Awesome. Paul, I really appreciate you spending some time today and sharing this. TikTok is a hot new thing. It's a hot subject everywhere. So all kinds of people popping up right now trying to To show people how to sell on TikTok and a lot of them actually aren't selling themselves or aren't doing it. They're just jumping on the opportunity to try to make some money teaching people that you're actually in the weeds out there doing it. So you're one of the people that everybody should follow and listen to because you're actually doing this and are successful doing it. So if you want to get into TikTok and need some guidance or want someone just to kind of imagine or hold your hand. Paul is your man. Go to rankster.co and check him out. Thanks again, Paul, for coming on the AM-PM Podcast. Like we talked about, I think TikTok has the potential to be the next biggest thing, even above Walmart. And they're not there right now. You got a little ways to catch up, but at the pace they're going and some of what they're doing, I think they have a good shot at being number two. Still distant behind Amazon, but it's something to pay attention to. And why not try it right now, as Paul was saying, and get your feet wet and maybe make a little money, make it rain while the sun is shining. I hope you enjoyed this episode. Got some good practical advice on TikTok. Out of it and hopefully you can apply this and give it a shot. We'll be back again next week with another great episode. But before we go, as always, I've got some words of wisdom for you. Ads are fast, but content lasts. Ads are fast, but content lasts. Kevin King signing out. We'll see you again next week. Speaker 2: Yeah.