10 Disadvantages of TikTok Shop: A Seller’s Perspective

December 20, 2024

The disadvantages of TikTok Shop are:

  1. Competition and saturation.
  2. Platform dependency and volatility.
  3. Customer service fees and return.
  4. Costs and payment delays.
  5. Inventory management and logistics.
  6. Technical issues.
  7. Product life cycles.
  8. Content creation burden.
  9. Trust and brand building.
  10. Regulations and restrictions.

These disadvantages create a challenging experience for new TikTok Shop sellers. The viral content culture of TikTok Shop makes it a challenge for all brands. TikTok Shop has strict policies and is quick to enforce them. Many sellers have reported TikTok's seller support as unresponsive and unhelpful.

This TikTok Shop seller shared their experience in a YouTube comment section. They explained that they got banned from TikTok after 1 bad customer review. All their shipped and delivered orders were refunded. They made an appeal, but TikTok's support was not helpful.

A TikTok Shop seller posted on Reddit, warning others not to sell if they don't own their own warehouse. They explained how their store got banned because of syncing issues. Their store did not sync with TikTok Shop properly, which listed some products that it was not supposed to. We can assume those were TikTok-restricted products which led to the ban. The seller also complained about TikTok's unhelpful customer service.

Another seller complained that TikTok support gave no fix for bugs with no timetable. They also explained TikTok Shop's payment delays. The probation period lasted until the seller reached 500 sales. If you get a violation within 15 days after a delivery, you get 70% of the payout held. The seller then emphasizes the importance of taking TikTok Shop's policies seriously. They also suggested that you create a list of products by hand.

I have over a decade of experience making money online. I've made multiple 6-figure businesses, including ecommerce. However, I found that the time invested wasn't worth it. I spent hours on product research and marketing campaigns. The advertising costs and platform fees also lowered profit margins. Ecommerce is profitable but is risky.

In this article, I will dive into each of the 10 disadvantages of TikTok Shop. I provided real-world examples of brands that faced these challenges. In the last part, I will briefly discuss if TikTok Shop is worth selling on and how you can automate.

1. Competition and Saturation

TikTok Shop continues to grow in popularity and leads to a large audience. This means that you will likely face much competition and market saturation. Niches such as fashion, beauty, and gadgets are highly saturated. Business Insider found that thousands of sellers are selling similar beauty products. This makes it difficult to differentiate brands from one another.

Scott McIntosh created a phone/cup holder product called Cell Phone Seat. His product video got 50 million views on TikTok. After going viral, Scott earned $1,000 a day from TikTok Shop sales. However, his sales soon dropped, and he was making $50 a day. He explains that going viral turned out to be a double-edged sword. Counterfeiters and copycats quickly copied his trending product. They started selling their own for cheaper and stole his business.

Forbes says that the fierce competition on TikTok Shop often leads to price wars. This reduces sellers' profit margins and reduces product quality. A Statista survey found that 60% of consumers said that price affects their buying decisions. TechCrunch found that most small sellers slash prices to compete with larger brands. This often leads to low or even negative profitability.

Increase in competition and saturation also leads to more expensive TikTok Shop ads. It saw a price increase of 20-30%. Sellers are paying more for branded hashtag challenges and influencer marketing campaigns.

2. Platform Dependency and Volatility

Making sales depends on TikTok Shop's algorithm, which directly affects your product's visibility. Your product's visibility will fluctuate due to constant algorithm changes. You also have limited control over how your product is presented to audiences. The algorithm curates content using audience data, which leads to uneven exposure.

Experiment Beauty is a beauty brand that faced problems with TikTok Shop's algorithm. Their product, "Buffer Jelly," was flagged as a food item by the algorithm. This led to its removal from the platform for several days. The algorithm also misclassified their lip treatment, named "Softwear," as pajamas. These errors disrupted their business and stopped sales of those products.

3. Customer Service and Returns

TikTok Shop sellers will face constant challenges when dealing with customers. A Khoros study found that 76% of consumers expect a response within 24 hours on social media. Slow responses lead to negative customer satisfaction and low ratings. TikTok Shop sellers must answer over 80% of queries in the last 30 days within 24 hours. Failure to do so results in "enforcement action."

Educational Insights was getting 500 to 2,000 orders a day on TikTok Shop. They had to manually process each of them on TikTok Shop and ship within 2 days. However, the company did not operate on the weekend. This caused issues from orders placed on Friday and the weekend. It led to several customers having unsatisfactory experiences.

TikTok Shop has a complex return process that can be a challenge for new sellers. Buyers have a 30-day window to request returns, which is longer than on other platforms. Common reasons include items not as described, the wrong size or fit, or defective products. Each reason has specific handling procedures, which can be confusing. Some products, like hygiene and safety items, often have return restrictions. This further complicates return management.

Capital One reported that 55% of TikTok Shop purchases are impulse buys. This is one reason the return rate is high, because of unmet expectations. AMZScout reported that the average order value on TikTok Shop is approximately $43. This is lower than on other platforms. Low-cost product returns hurt the already low profit margin.

4. Costs and Payment Delays

TikTok Shop has several platform fees that can lower your profit margins. They charge a marketplace commission fee of 5%–8% depending on the product category. There is also a transactional fee of 1.8% of the total transaction amount. Other fees may include subscription, payment processing, returns, storage, and packaging.

E.l.f. Cosmetics expressed concerns about the increasing commission rates and fees on TikTok Shop. They had to reassess and adjust their pricing strategies to maintain profitability. Fortunately for E.l.f. Cosmetics, they already had a huge following of loyal customers. However, many brands with strong competition have struggled to stay visible.

You also need to set aside money for marketing and advertising costs. The costs of ads depend on the type you choose. CPC ads cost $0.10 to $2, depending on the targeting and competition. In-feed ads cost $10 to $150 per thousand impressions. TopView ads cost about $65,000 per day. Influencer partnership costs $4 to $2,400 per post. The price depends on the influencer's popularity and following size. You can also engage with creators using TikTok Shop's affiliate marketing module. You usually pay the affiliates a commission of 5% to 8% of the product price.

You may face delays in receiving your payments due to processing times and platform settlement periods. It takes 1–8 days after an order is delivered before you get paid. New sellers often receive their payments in 8 days, but faster shipping performance can shorten this time. This delay can create issues with the seller's budget.

5. Inventory Management and Logistics

A product on TikTok Shop can rapidly go viral. This makes it a challenge for sellers to predict their sales volume and keep adequate stock levels. Overestimating the number of sales leads to unsold inventory. Underestimating sales volume leads to a lack of stock. An unexpected surge in sales leads to logistical issues and order delays. These all contribute to customer dissatisfaction and negative reviews.

Made by Mitchell is a makeup brand that has encountered inventory and logistical issues. Their products quickly gained viral attention that they did not expect. The brand had to increase staffing at its head office and overseas factories. This allowed them to manage the production and logistical pressures effectively.

6. Technical Issues

TikTok Shop, like all platforms, has its fair share of technical issues. Occasional system glitches have been reported to affect syncing with other ecommerce platforms. This often leads to order processing delays or incorrect stock information. Some sellers also reported difficulty syncing their online stores with TikTok Shop. There have also been complaints about the TikTok team's slow response to technical issues.

Effies Finds had problems integrating their Shopify store with TikTok Shop. Some of their products were not syncing properly, which led to inventory count errors. They contacted TikTok support, who kept giving them the runaround. Whenever they submitted a ticket, they received generic responses. The issue was only resolved after they asked for help from the community.

7. Product Life Cycles

TikTok Shop's ecosystem largely revolves around trending products. The demand for products depends on what is trending. Viral products gain relevance just as quickly as they lose it. Sellers often face pressure to update their offers to match current trends and customer interests. This volatility makes it difficult for brands to compete and keep the upper hand. It also creates inventory management challenges, such as overstocking or stockouts.

Hero Cosmetics is one of the first brands that signed up for TikTok Shop. The skincare brand experienced difficulties in maintaining its visibility on the platform. TikTok's fast-changing trends pressured Hero Cosmetics to adapt quickly to the market dynamics. Hero Cosmetics remained profitable as it was already an established brand. For new brands, this trend volatility may end in an unprofitable TikTok Shop store.

8. Content Creation Burden

TikTok Shop is a content-focused platform. Thousands of creators compete for visibility every day. Influencer Marketing Hub says that user-generated content accounts for 55.7% of successful posts. This trend pushes sellers to consistently produce authentic and engaging content. You need to keep up with TikTok trends to ensure your content is fresh.

Gymshark, a fitness apparel brand, expanded its market to TikTok Shop. To keep visibility, they had to regularly create fitness-related videos. This ranged from workout tutorials to challenges. Keeping up this momentum requires continuous investment in hiring content creators. Gymshark also partnered with influencers to repost their content. TikTok's algorithm prioritizes viral content. Even established brands may struggle to stay visible without ads or influencer partnerships.

Content creation requires talent and skill. Outsourcing the process might be expensive. Creating quality content using a freelancer can cost $50 to $500 per video. In-house production costs around $50,000 to $100,000 a year. While this might be affordable for larger brands, it might be too much for new sellers.

9. Trust and Brand Building

New stores will first need to build trust with their audience through brand building. Counterfeit and low-quality products are growing issues. TikTok blocked over 5.2 million infringing products from going live, from July 2023 to June 2024. Still, more of these products enter the market every day. New brands have to prove themselves as trustworthy by ensuring product quality.

TikTok's audience is mostly made up of the younger generation. Use generational trends that appeal to this demographic to build your brand successfully. The viral nature of the platform can also damage your reputation in an instant. One viral negative review can ruin your brand. Addressing negative feedback quickly can be challenging and even costly.

Ava Lane Boutique saw its reputation damaged by 1 viral TikTok video. An influencer who was denied partnership posted the video that criticized the company. It showed the VP of the company calling the influencer "not that cute" after denying her application. The video went viral with over 2.3 million views in the first few hours. Ava Lane Boutique's Google rating dropped from 5 stars to 1.5 stars. They have since apologized, but the damage was done.

Brand building not only requires quality products but also community engagement. Brands that don't maintain a good relationship with their community often get cancelled. Therefore, it is important to keep nurturing your current following.

10. Regulations and Restrictions

TikTok Shop regularly updates its regulations and restrictions. The updates often cover product listing policies to improve marketplace compliance and safety. It is your responsibility as a seller to stay up to date. Non-compliance leads to enforcement measures, such as product listing removal or shop closure.

TikTok Shop seller Patryk Marketer had his account restricted because of negative reviews. He had hundreds of products listed in his store. While scaling quickly, some products he sourced were of poor quality. This led to several consecutive 1-star reviews. TikTok shadow-banned his store for this reason. He has since submitted appeals and vowed to improve customer service.

TikTok Shop prohibits cross-border sellers from selling certain products, such as pet food. You may need to provide more documents, like brand authorization, for some products and brands before listing them on TikTok Shop. High-risk categories, like beauty products, electronics, children's toys, and food items, require certification. Restricted categories, like consumer medical devices and children's products, require prior approval. You need specific certifications before you can list them on TikTok Shop.

Country restrictions can affect your TikTok Shop business. For example, the U.S. recently passed a bill to ban TikTok from the country. If not overturned, this would mean TikTok would no longer be usable within the country in 2025. This would directly affect TikTok Shop sellers in the U.S. market.

Is TikTok Shop Worth It?

TikTok Shop is worth it if you can navigate the disadvantages involved. The platform is the 5th most popular, with 1.58 billion active users. Most buyers are from Southeast Asia, the U.S., and Europe. Most buyers fall within the age range of 18-34. This makes TikTok Shop profitable for brands that target the younger demographic.

However, success with TikTok Shop means following viral trends. You need to study how to create content that can go viral. This requires creativity and an understanding of the culture. Track your store's performance regularly and make accurate sales predictions. Establishing your brand presence and minimizing risk should be your first concern.

Lastly, keep an eye out for global affairs. Anticipate the worst and make preparations. For example, if you sell in the U.S. market, you should have a backup plan in case the platform is banned countrywide. The best strategy is to diversify by expanding to other ecommerce platforms.

TikTok Shop Automation

TikTok Shop automation is crucial for scaling your store. This is done using a combination of outsourcing and AI-powered tools. Automation will take you out of the day-to-day processes so you can focus on scaling your business. Popular integration automation tools are AutoDS and Webb. Common AI tools used to create video content are Descript and Lumen5. AI tools for research and script writing include Ippei's free content writer and Claude AI. You can outsource freelancers from Fiverr and Upwork. There are also automation companies that can handle all aspects of your TikTok Shop.

However, automation comes with its own risks. It is expensive to pay for the tools and outsourcing. Automating your content creation process may lead to lower quality.

My Recommended Way of Getting Traffic to Your Store With Little Effort

Creating a lead generation site is my recommended way of driving traffic to your store. It requires minimal effort and costs little. You create a site and use free SEO tactics to rank it on Google. This site will passively attract traffic as long as it stays ranked. You then drive the traffic to your store. If your store has its own website, you can use the same SEO tactics to rank it on Google.

I use the same strategy with my number 1 business, local lead generation. Instead of driving traffic to a store, I drive it to local businesses. These local businesses pay a monthly rent to benefit from the leads they receive from my sites. This gives me a predictable monthly cash flow. Each local lead generation site earns $500 to $3,000 a month.

conclusion-lead-gen-maps

Compared to ecommerce, local lead generation has little competition. Compared to competing with thousands of sellers, you only have to outrank a handful of sites. Scaling online stores requires automation, which leads to higher costs and risks. Scaling a local lead generation is as simple as repeating the rank and rent process. I have multiple lead gen sites that earn me over $52K a month. Local lead generation's passive cash flow lets me invest in other businesses and even provides capital.

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Ippei Kanehara
Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2025, is to build your own lead generation business.

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