How EXACTLY To Make Money on TikTok Shops transcript

$50 million brand wellestablished brand profitable doing well but it's been all meta they've heard about Tik Tok shops and they're like okay we want to get in on this maybe they have a Tik Tok account but it's you know they're not going viral on Tik Tok or anything like that it's not a wellestablished thing so the organic social side of Tik Tok is nothing nothing much how should that how should a brand like that and feel free to make up any other I'm not I'm really not thinking of anybody in particular so make up any other attributes of this brand that you want how should what should that brand do next besides of course higher up growth Commerce to help them which which I mean actually plug yourself here like if this is you should you should talk about who the ideal client is to work with you and some of that stuff because I think I think that would be helpful for people right people don't want to figure this out from scratch but but tell people tell people um what that what what that brand should do next sure so we're we're working with brands of of that size we've we've been really really lucky to get into this this kind of sort of special group at Tik Tok called the global key accounts so that's brands that are four billion and above um that's been that's been a mindboggling to work with brands of that size um and so we love $50 million Brands because they're a lot more Nimble yeah right so so yes we would that that sounds like a great like a great time working with a brand that can make decisions a lot faster um and could do stuff and it's not all caught up in red tape so that's that's fun so um so let me walk you through exactly what we would do at upgrowth just because I think that that's and and by the way you know at some point when when you're listening to this upgrowth is becoming social commerce Club um I'm going so all in on social commerce that we are we are rebranding but really like reculturing into social commerce club and so we're going to have social commerce Club Creator Network which is what I'm going to talk about here that that is really the big key part of this and why it's like so Creator Centric um you know what what we're doing here so let me so so enough about that we this is what we do this is what we eat eat sleep and breathe all the time so that's my that's my pitch for this is to to to get in touch with us great but let let me should do upgrowth commerce.com yes yeah go to upgc commerce.com or search me out want work with Jordan directly um go check it out upgrowth commerce.com link is in the show notes for that and you can also follow Jordan on X or DMM there right uh Jordan westom cool yeah y I though occasionally I do I do miss my DMs like Taylor holiday messaged me this morning and multiple times hey you there are you there yeah I have I have a client I need to send your way yeah yeah great yeah okay well try and DM Jordan Westcom all the links are there so okay so that all said thank you what do they do yeah yeah super appreciate that Andrew um I'm I'm really here just to give the knowledge because it it's really important that people understand so number one you need to think about the Creator right at the end of the day this is Creator this is going to be Creator driven they're going to be the biggest leverage that you ever have and so what creators want right so before you ever do anything you need to think about your product right do not sell the same product that you sell on Amazon or on your doc or in retail on Tik Tok it has to be Tik Tock specific so that could be a Tik Tok specific product right so you could have a Tik Tok specific size it could be a Tik Tok specific bundle but it has to be something specific now Andrew you're probably wondering why right what is the big reason it's because these creators understand the halo effect that Tik Tok has they understand the Halo that they have that they are salespeople for the brand itself and that they're not going to get compensated on anything other then converts on Tik Tok itself right they do not get a Halo check right the brand does but they do not and so these influencers especially the high-end ones and these are the ones you want to go after right 100K plus of gmv they are not going to work with you if you do not have a Tik Tok specific drop right so the brands that we're working with that are doing really well have built this in and they're doing all of their drop schedule on Tik Tok and so they're getting all of this insane amount of of uh Buzz because they're doing these Tik Tok shops specific drops and so this is what we're recommending right is like have a product there so you need to think about that first try and have an aov now like people would be like oh the lower aov the better I totally disagree because this is also an ads game right you are going to have to pay to play it's not just influencers that are going to drive this if you want to get to scale you're going to have to run some ads right so like on a a recent account that I'm thinking of 1.2 million in sales in the month we ran about 300,000 of ads so pretty pretty good return I would say yeah right um but remember now we also have to bake in a certain percentage for those Affiliates as well right so that's still it still puts it well above like a 2.5 return on ads spend I recently had a month where I made 3500 ads in one month for five clients and when I say I made them what I really mean is that my team made them and that would have been impossible without my friends at Behind the-scenes studio Behind the-scenes studio is a meta ads focused design and edit agency based in the Philippines so it's incredibly affordable people with deep talent and in fact have been trained in the way of thinking about meta ads that I talk about on this podcast all the time which is building lots of volume lots of variants for every ad and so they're well set up to execute a great meta ads design and edit strategy giving you beautiful ads that you or your clients will love at serious scale go to BTS studio.co.uk 00 in affiliate fees let's just say right that's still a two to one like that's still at that kind of scale that's that's monster that's monster you know yeah that's really good performance plus the Halo right plus the Halo that we don't even really understand yet exactly what it is y so so uh that is the very first thing right is is set yourself up for Success let's so let's so you want to think about Target creators ideally especially the 100K gmv types and you want to think about specifically designing specific product that is going to be it's going to make their life easier on selling it specifically on Tik Tok and be something sort of exclusive I imagine there's even a world here where you could like make I don't know if you want to go all the way to co-branded product but to do something really clever maybe there's some kind of way to sort of make it really unique to them is that worth doing probably not because you're going to be working with hundreds of influencers okay great okay great right so that might be a little bit more difficult what I would do is co-brand it with like something with Tik Tok right like I I yesterday on my agency uh at our agency we had Sarah linger come in and uh Sarah is just an absolute Master when it comes to talking about um psychology right and she was talking about the psychology of Tik Tok shop and some of the color choices that they've made so think about some of the color choices that Tik Tok has made right they're not dumb they understand the colors around that use those colors in your products right maybe have a Tik Tok specific product that has some sort of color right don't use their branding but pull some sort of color that Tik Tok uses um and then have that Tik Tok specific think of Costco right Costco will always have a different model right you can never get the very same thing that you get at Costco anywhere else use that exact same methodology on Tik Tok shop you're G to have to do it on the other channels as well right YouTube is going to be the exact same so as meta how do I identify those creators so there are a few different places right so number one is within the Tik Tok shop affiliate center right so in the affiliate Center you can actually see these creators now before we get to creators we're we're not quite done yet right so yeah so now so we've now identified the product now we need to actually make some content right so first it's a Content game sure you can go ahead and try and get in get in touch with creators the problem is they're going to see a Target collab come in right it's going to come in from this brand this $50 million brand they're going to look and they're going to say well they've done no sales I am not going to risk taking this product and doing no sales maybe they'll take the product just because they're like ah good product they're not going to spend any time on your brand right so that's that's what you need to then uh so so the whole idea at this point is to try to get a thousand sales and 100 reviews on your product now did I make that number up arbitrarily yes the reason why I did it's just it's just an easy one to remember sales sales thousand views no reviews so a thousand sales on the product 100 reviews on the product right what this does is this immediately tilts uh it tilts the relationship with the influencer to much more even right now they're looking at you uh evenly rather than looking down on you as a brand that has no sales right so it has to be on a specific product the one that you're trying to get out to them so you're trying to get that first thousand sales and 100 reviews now the way that you're going to do that is yes number one you can send a bunch of product out you're not going to get great influencers at first that's a problem if you just go ahead and send it out so instead what you want to do is you want to send out product to people specifically to make content right so if you already have influencer relationships and people who can make ugc awesome if you have some ads that have done really well on Tik Tok specifically before make those into Tik Tok shop specific ads right um this is the time where you're going to start to test out content with some of these lower creators right you're going to find them on Tik Tok shop affiliate Center maybe places like join Brands you're going to go through Creator networks whatever you can do to get as much content out there as possible and then put ad dollars behind it this is where you're going to really find where your break even is as well right so your break even with ads you're just trying to break even up until this point till you get to a thousand sales and a 100 reviews okay once you get to that point you're then going to start to reach out to bigger creators right so once you have once you have that then you're going to start to do Target collaborations with bigger creators and try try to get them to take you on by offering much higher affiliate Commission that you would normally be comfortable with so you're going to offer like 40% affiliate commission just to get some big creators on board and get them making money now here's one of the other like little secrets that I don't think anybody really realizes and we know this because we are Creator Centric right we're just thinking we're like What do these creators want exactly and so I've interviewed them for hours just to ask like what is the thing behind the thing that you want right what they want is they want a commitment of AD spend behind the videos that they make so one of the best things that you can do is actually create some kind of Rel relationship where you're paying them uh a small retainer to make a certain amount of videos so here's one of the things that we aim for I'll tell you exact numbers we aim for $1,500 for 20 videos from Top creators right ones that do at least $100,000 so we're getting 20 videos out of the minimum right normally they'll do way more than that but this is the the contract that we have then we also just so I understand that contract you pay $1,500 to a to one creator that creator gives you 20 videos yeah often more and okay and then those videos so keep going then what do you do with those videos so then with those videos we take those and we commit to putting a certain amount of AD spend behind it whether that's anywhere usually between $2 and $5,000 so you're telling them that when you when you make the exchange on, 1500 bucks for the videos right you're saying hey I'm gonna pay you for the videos and then I'm also going to commit to putting money behind these videos I'm gonna exactly I'm gonna also commit to putting money behind the videos and I'm going to pay you this commission right okay yeah got it so there okay got great yeah are they getting commissioned are they getting commissioned on the uh on on purchases that are driven by ad spend yes they are okay great yes yeah man that is a great deal for them it's a great deal for them so if they have a video that takes off this is this is a classic thing like one of the things I hear you saying here Jordan is that like to win for your brand you cannot try to exploit people like they are very valuable this is how Partnerships work business you should want them to make a bunch of money yeah yeah totally so Brands will come to you and be like oh that's not fair it's like really I think it's actually the most fair thing right that like this is how and because your ad cost is going to be so much less because this content works so well right like this is the this is the way we're not trying to take advantage of each other we're trying to win together now if your brand doesn't have good margins this isn't going to work for you if you don't have at least 70% retail margins don't go into this yeah right it's not it's not going to work for you so um or or sorry 70% D Toc margins yeah yeah do you mean landed to the customer like what all are you including that margin calculation just again just to be as clear as possible for people yeah I'm I'm including landed like including shipping yeah okay got it okay 7 that's 70% margin is that's a lot of margin uh you know I mean I most most brands that we see have somewhere in that sort of range yeah right like yeah I mean yeah I don't know after shipping after everything I'm conf facturing in there 70 is 70 is a lot that's uh I mean I I think maybe especially like in Beauty Personal Care supplements spaces they're they're all they're all getting up there for sure um but that that's specifically those categories a lot of the times you know apparel is not getting there typically once you net the return rate out um you that's a good point so so doing the calculation for yourself though just just go and do it on chat jbt right like that's the the easiest way is just to go put all your numbers in and see if this is going to net out with you getting somewhere around a three return on ad spend it scale yeah um yeah if you can get a three return ad fantasy you you can win yeah [Music]