Beware of Common TikTok Shop Setup Mistakes: Account Restrictions & Best Practices

Introduction

Opening a TikTok shop can be a lucrative opportunity for e-commerce entrepreneurs, but it’s important to be aware of common mistakes and best practices. From account setup to restrictions, there are key considerations to keep in mind for a successful TikTok shop.

Understanding TikTok Shop and Opening Your Shop

• Opening a TikTok shop is a lucrative opportunity for e-commerce entrepreneurs, and it’s currently experiencing a gold rush.

• To start a TikTok shop, you need to understand the logistics and the process step by step.

• When opening a TikTok shop, there are some misconceptions regarding the use of personal information versus LLCs.

• Using personal information for the first shop has the highest approval odds and is the best route to take for quick approval.

• If you plan to open multiple shops, LLCs can be used but have a high disable rate, and an appeal process is required to re-enable them.

• It’s important to be US-based for personal information and note that only one shop is allowed per LLC.

• If a second or third TikTok shop under LLC is disapproved, a carefully crafted appeal has shown a 100% re-enable rate for the shops.

Summary of TikTok Shop Setup Guide

• When setting up a TikTok shop, it’s important to provide accurate information and be thorough in the product listing.

• Verification of the TikTok page for the shop onto the seller account shop became an issue starting from January 18th.

• To resolve the verification issue, it’s necessary to submit information that is already on the shop to verify the TikTok page, not through the usual verification settings.

• A bank account is not initially needed to start selling via TikTok shop, and there’s no requirement for an LLC or linking a bank account to start selling.

• It’s recommended to complete the tax info, set up shipping, create product listings, and link the TikTok page when setting up the shop.

• For approval odds, having a Shopify store or any other store where the product is sold can be helpful, even if it’s not currently selling.

Key Points on Rules and Regulations for E-commerce

• E-commerce rules and regulations are under scrutiny, and the level of oversight is refreshing for the speaker. This level of scrutiny and structuring of the platform is appreciated.

• An important rule is the requirement to provide three-day scan-in through USPS, which affects the dispatch rate and is tracked by TikTok shop. It emphasizes the need for same day or next day shipping.

• Feedback score on TikTok shop is crucial, similar to the impact of feedback on Facebook. Your customers’ feedback drastically affects the health of your shop, and there are specific metrics to be followed under ‘Account Health.‘

• A 24-hour response rate is mandatory for customer service, and it’s emphasized as a significant requirement. This is a basic standard that must be met without exceptions.

Tips for Selling Products on TikTok Shop

• Before sending samples to creators, it’s important to be selective and analyze the stats of each creator. Avoid sending samples to brand new creators who haven’t made any money on TikTok Shop unless they have a significant audience or have generated substantial revenue.

• Utilizing a bot for automating the process of evaluating creators has been effective for some clients, resulting in significant sales growth. Cold outreach to creators is also a part of the strategy, but it’s crucial to set clear expectations for creators, including the obligation to post within a specific timeframe after receiving samples.

• Maintaining high standards and meeting specific criteria are emphasized, as failure to do so can lead to blacklisting and negative consequences for the seller. There is also a recommendation to limit the number of samples sent out based on inventory and scalability goals.

• The speaker also expresses the importance of the video, highlighting that it’s not driven by ad revenue but rather a genuine desire to provide critical insights for sellers aiming to succeed on TikTok Shop.

Inventory Management and Fulfillment Challenges

• The speaker discusses the challenges of managing inventory and fulfillment for his products.

• He mentions that he usually orders about 500 units of a product as a good starting size for inventory.

• He talks about the need to scale and mentions sending out 30 samples to start, aiming for 10-15 sales a day, and then ordering 3,000 units as the next step.

• The speaker emphasizes the importance of being prepared to manage unexpected issues and scaling challenges, particularly in fulfillment.

• He shares a story of a fellow entrepreneur who faced fulfillment issues and cash flow problems due to inventory challenges with a drop shipping model.

• The speaker advises being on top of fulfillment and points out the potential impact on cash flow if there are any issues with inventory and fulfillment.

Striking Deals and Cash Flow Issues

• The speaker has provided cash to a student and is in talks with two others to potentially strike a deal that involves taking a piece of the company in exchange for assistance.

• They are willing to provide transactional funding if it makes sense, showing a willingness to support those in need.

• The speaker emphasizes the importance of being creative, mentioning their own experience of starting e-commerce at 17 with limited funds and no access to lines of credit.

• They explain a scenario where they would need to order inventory to keep up with orders, highlighting the practicality of seeking financial support based on existing traction rather than just starting from scratch.

• The speaker also addresses fulfillment challenges, particularly with drop shipping on TikTok shop, and the difficulties with cash flow when paying for inventory upfront.

• They share their own positive experience of working with a supplier who provides upfront funding for inventory, demonstrating a practical solution to cash flow issues.

• Finally, they encourage viewers to ask questions and engage with the content, hinting that their feedback and questions will be addressed in the next video.

Conclusion

Avoiding common mistakes and following best practices when setting up a TikTok shop is crucial for e-commerce success. From understanding account restrictions to effectively managing inventory, these insights can help entrepreneurs navigate the complexities of TikTok e-commerce.

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