How To Win BIG On TikTok Shops (W/Jordan West) transcript

All right, Jordan West. You shut down your Meta Ads agency You're so all in on TikTok shops that you stopped literally getting rid of your Meta Ads agency to run all TikTok shops. Is that right? Do I understand that correctly? I mean, basically, yes. The This is how much I really believe that everything is changing, the way that people are buying, their behaviors, the way that people are shopping is going to change forever.

Am I done with Meta? No, absolutely not. But, let me tell you why I think that it's different, right? $1.3 trillion is what social commerce has been in Asia this year alone, $1.3 trillion. That's a completely different ball game than than what we're doing here right now, right? Like, last month TikTok shop was $700 million. We are just at the beginning of what this social commerce craze really is and and and why consumer behavior is going to change forever.

That is um a staggering number. $1.3 trillion is a staggering number. I had no idea that that was the case. I would My follow up My immediate question actually was going to be or my clarifying was like, how much really am I sleeping on TikTok shops? And your answer there appears to be like, a lot. You're sleeping on it too much if you're not getting into it. Well, generally generally that area, like Southeast Asia, China, is about the same, right?

As far as GMV is concerned, as America, right? So, if we think that this is about a $1.3 trillion $1.3 to $1.5 trillion industry, that is what people are sleeping on right now. Yeah. Right? So, is is this like the most incredible thing right now? Well, I'd say that's in some ways, yes, actually, right? For the brands that are actually understanding it and taking advantage of it, yes. Um I I have been on the forefront, like, on this on the kind of cutting edge of it, just kind of barely seeing like, what is it?

And it's funny because I'm a Canadian. I don't even have access to TikTok shop. And yet, that see this incredible uh just this incredible future of what shopping is going to look like and how people are going to shop and we're absolutely all in on it. Yeah. Um okay, that So when you So let's actually define a term here. You you use the phrase social commerce. Um what do you mean by that exactly? So when I'm talking about social commerce, I'm talking about the checkout actually happening within the app itself, right?

So within the social app itself. But there's been there's been, you know, meta checkout for a long time. Do I consider that social commerce? No. I consider social commerce when it is being influenced by uh by other people on the social network, right? So you and I have So something that I would consider social commerce is I'm like, "Hey Andrew, do you have a good app for this?" and you tell me about it, right? Word of mouth, I consider that social commerce.

What TikTok Shop has done is it's come into affiliate marketing, right? Influencer affiliate marketing and it's really created that that same type of word of mouth. It's just the way that people like to scroll on TikTok that has happened to absolutely explode it. That's the social aspect of it, right? So when I look at social commerce, it's like it's it's not so much search, right? It's actually seeing what other people are doing and being like, "Oh, I like that." Before it was like, "Hey, I like that.

I'm going to bookmark that for later." right? "Oh, I like that person's like that influencer." And so I'm going to kind of listen to what they say, but it wasn't really direct response. It's social commerce is direct response influencer marketing. Yeah. Yeah, I mean you you've what you've had to do for a while is like the game plan like the Kinship guy. I just had Taylor Lagace on here, you know, where it's like get, you know, you seed the product to the influencer on Instagram or Facebook or whatever.

They They post about it. Then you grab the content and go put it in Ads Manager. So you actually have to like There's like this middle step in there that the the way they've done a lot of influencer marketing for a while, right? Where you're like you like you aren't you know, they would even say after running a bunch of influencer agency stuff, like this has um the influencer approach, like the post is gravy. Basically, what you really want is the content to go put in your ad account.

And and what you were talking about is something very different than that, right? Which is like now now the actual like everything about it is going to happen at the level of the influencer affiliate relationship. Um and and that's not I mean I don't want to sound like that's breaking news. Like we've we've heard about TikTok shops for a little while. And I was actually also talking with Taylor Holiday recently um for for also an episode of the podcast.

And we were I was talking about how there's this thing where for, you know, 10 years, basically my entire time in e-commerce there's there's this dynamic which is that Meta ads just rules the roost. Like you you build your business on Meta ads. And you know, there's these outlier cases, you know, Isaac Medeiros out there just getting endless YouTube views and and, you know, whatever, right? There's some people Isaac is amazing when it comes to YouTube.

Like have you had him on before? Like I can't even It was one of my most popular episodes ever, actually. It's not even on YouTube cuz before I was even on YouTube. But like if you go back into my pod feeds, you can find it. It's actually a great episode. It was when he was doing katana stuff. And it was like 10 million in revenue, zero dollars in ad spend. And you're just like, what in the world? This is the most profitable business in the world.

Um but um but yeah, but like but see, that's exactly it though. He's such an outlier. Um and increasingly, one of the things that I've seen is right now you got people talking about Apple 11 as this other dynamic. So that's like total separate thing, you know. Yeah. Where it's like, oh, whoa. Facebook like ROAS at like meaningful scale. But the only other thing I can think of recently that I've heard of anybody talk about that is like this, even though I've thought for a while this kind of thing was going to happen, like Meta at some point Meta wasn't going to be the only thing for ever, you know.

Um well, that's TikTok shop. And it was people going like, oh, okay. But it seemed to me that there was like this real Pareto principle kind of thing where a few people more than more than Isaac Medeiros on YouTube, but a few people are making a bunch of money on TikTok shops. But that it was but that it was only a sort of subgroup. And I'm increasingly hearing little bits of chatter like you really need to be lower AOV.

You really need to be the right customer. You know, and so I like part of the reason I was so jumped at like oh Jordan please come on my podcast is cuz I'm uh stealing knowledge from you right now so that I can understand how you see the world of this. Like what is happening right now with TikTok shop? And then where is this going? You can answer that in any order that you want. So this is I think that that it's all kind of combined together, right?

It's not just it's not just today cuz today is also amazing. Today is incredible, right? We have all of the eyeballs. Think about how much time people are spending, the 170 million daily users in the US are spending on TikTok. We've known for a long time that TikTok drives a huge amount of business in basically every single product category. The problem is we didn't have really good attribution, right? And we were relying again, it's funny because I just had Max Blank, one of the founders of Triple Whale on and we we're talking all about multi-touch attribution and this move to MMM, right?

And this move to more more of these bigger kind of models that are actually modeling out like what exactly is pushing actual consumer behavior, right? And we found out that TikTok was actually one of those things that was, right? A lot of organic on TikTok and TikTok ads. Now, the problem was TikTok as a platform is so ridiculously good at keeping you on the platform that it's horrible for advertisers in a direct response way.

We never saw anything meaningfully at scale like we did with Facebook, right? Facebook was really good at getting traffic to your site, knowing who to get there, and knowing knowing who was going to convert at the time. TikTok's thing is that they're so good, they're the crack of social media more than anything, right? And they're so good at keeping you on the platform and keeping you scrolling on the platform. So, they were the perfect ones to introduce social commerce, right?

And they introduced it in a hard way. And so, today I I think all of those things that you said are wrong. They're They're just They're just wrong. And And the reason why is I have I have this incredible case study right now of a very well-known shoe brand with an AOV of $80 Yeah. that is absolutely crushing on TikTok Shop. Yeah. Right? Absolutely crushing. Now, here Here's the other crazy thing is that it's not just that.

So, we we were able to get them from zero to seven figures monthly. The fastest of any of these big brands, um which was which was phenomenal. But, it wasn't just that. It was that their their VP of e-commerce was coming to us and saying, "Hey, our CEO is wondering what the halo effect is because we've never seen such a sell-through on dot com, on Amazon, and in retail. Everything is up and we can't really figure it out because we this is kind of the one big new initiative.

And we're only doing I mean, this is a billion-dollar brand, right? We're only doing a million dollars a month right now. Right. So, they're like To them, that's not really a big deal yet, but they're seeing it everywhere, right? And so, we're we're coining this and I'm coining this. I I'll take it. Uh the TikTok Shop Effect, right? That That there is this There's this thing that happens and you can see like if if you've talked to Paul from from BK Beauty at all and seen anything that he's done. scheduled for like a week or two from now.

Yeah. Awesome. So, talk to him about the TikTok Shop Effect because you'll see he was just floating along like like a normal e-com dude doing maybe 5 million bucks a year, right? Nothing to write home about. And then boom, went on TikTok Shop and up like that. Yeah. So, there's something There's something there about the influence that TikTok specifically has. And I think it's going to translate over to Instagram. I think Insta when Instagram and Facebook and when Meta releases their platform, we're going to see something happen over there very similarly.

Right right now it's not direct response. We we know influencer marketing isn't direct response. Um and it's not necessarily influencers that are doing all the selling. Sorry Andrew, I feel like I can just talk and talk and talk about this stuff. So, I'll let you like jump in here. No, I uh I I was loving it if you if if you didn't just lose that thought, keep finish it. You're doing great. I mean, I appreciate it. It's really helpful.

Yeah, I mean the the big news is that social commerce is here to stay, right? Let's just say January 19th, like the the US is crazy and shuts TikTok down, which is not going to happen, right? No nobody thinks that that's going to happen. In fact, even Trump today said uh that he is not going to allow that to to happen on January 19th. Yeah. So, we know that's not going to happen, but let's just say that it did. Social commerce as a theory is here to stay, right?

Shopping within these apps is here to stay. Live shopping is here to stay. I was recently in San Diego um and I went into a a shoe store, and I heard this guy being like really loud in the back, and he was behind a curtain, and I was like, "What's going on in here?" And then I realized, "Oh, the dude is live selling on Whatnot." And he's just going through, and he's just like, "All right, I got this thing." And he pulls it.

I was like, "All right, sold to you." And it was like every 10 seconds he was selling something, live selling in his retail shop, and that was part of this experience that was going on in the background. And I was like, "Oh my gosh, the Asia is here, right? Th- This is not a new thing in Asia. Yeah. This is very normal, right? Think about it. We have one agency that I know of in all of North America that has live shopping capability for TikTok Shop right now.

It's Orca in in LA. I just just chatting with them yesterday. I don't know of anybody else. Maybe there's like a few outliers out there. We do not have the infrastructure built for this yet, and yet it's coming, right? We can see it's coming, and and it's here at the same time, right? It's one of those things where it's like we're built we're building all of our capabilities right now knowing that social commerce is going to be the next big play.

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You can set up that same test for yourself. You can also use it for Google ads, GA4, TikTok. We should talk about it in this episode. All kinds of other things. Basically a one-stop shop replacement for Google Tag Manager and they're building out all kinds of other stuff on the product all the time. It's great. Go get it right now for 100% server-side tracking for your Meta ads with Billy, b i l y dot a i. Did you uh run behind that curtain to that guy and be like, "I'm Jordan West.

I'm building my whole agency around doing the thing that you're doing." Did you do I I should have. I did take a selfie to Like, dude, I like I This is actually what I believe in right now. You're proving it to me right now. Yeah, yeah, seriously. I um yeah. I uh okay, I I want to um I want to come back to how to do it in a minute. So, if you're watching or listening to this and you want to know how to just like learn what to do next, okay?

Um we're going to get there. So, I just want to hold hold that. I want to ask one more big picture framing question, and it's You just brought it up a little bit, which is this question about like uh uh you know, what if TikTok got shut down? I asked you this in the same question in San Diego. I'm sure a lot of people ask you this. Um you know, saying what what what do you do if you pivot your whole agency to this and TikTok goes away?

And actually, even when I asked you that, like not really thinking it's going to happen cuz I I just don't think it'll happen either, but there's just too much money to be made. But, the um But, your immediate answer to me at the time was very similar to what you're saying right now, which was like, "It doesn't matter. YouTube Shops will be right after it, and we'll be ready to take it on." Um and and so, tell me what is coming down the pipe here besides I mean, people think of this kind of dynamic, they think of TikTok Shops.

What else is actually coming next similar to TikTok Shops that this will all be part of, you know, what what How else is social commerce going to develop as far as you can see it? So, YouTube Shopping has made the first announcement, but they are they I signed an NDA, so I can only say so much about it, but I'll let you know that they're not ready. They're they're not ready for the prime time. They call it a beta. I call it like pre-alpha of where where they're at right now.

Um there's not enough set up yet for it to be a viable channel at scale like TikTok is. Now, what I think is that and what I've heard from people who report to the C-suite at Meta is that they were going to be ready for Q3. They skipped it, and they're going to be ready for Q1 releasing their affiliate network. That's the biggest thing, right? They already have the creator network set up in the background. They just don't have the affiliate network set up.

That is the big key, right? So, once their affiliate network is completely set up, and we're able to tap into that, that is the next big thing. Now, when I think about all of this, and the reason why I'm not worried is because the the secret sauce of what we're doing right now is that we're caring about the relationship with the creators the most. What this has changed is creators' lives, right? Creators went from going from one deal to another.

I can't even imagine, right? Being like, "Ah, am I going to get like, you know, maybe I'll get this brand. Oh, maybe they'll pay me a thousand bucks to post. Who knows, right?" Like, it wasn't really viable for them to this group. Like, so we have a we have an incredibly high level group of creators, and we're really creating community around these creators. And these creators come in who are now able to like pay their mortgages off with TikTok Shop, right?

They've gotten a taste of what it's like to actually make incredible money be doing something that they're incredibly good at, right? That's the that's the cool thing. It's not the same as being an influencer, right? An influencer is all about building this personal brand and standing for some something and trying to fit products in. This is not that. This is not building a personal brand. This is selling online. Being like, "Hey, I'm really good at this." I am calling this the the MLM, like the Avon of 2024.

That's a really good comp. Yeah. I I didn't make that connection right away, but I think what you're saying is exactly right. It's It is It is totally the replacement for that, and there's some subgroup of people who are going to be really awesome at it. The algorithms are perfect for it, right? Like Like, just so everyone knows, Instagram's algorithm is not like barely any different now than TikTok's is, right? Like, it's it's basically the same.

And so, when So, let's just say TikTok gets shut down, right? Who's going to be there immediately? Meta, right? Where are all those creators going to go? Over to Meta. They don't need to have a massive following to get huge reach anymore. They just need to know how to sell, right? And need to know how to go viral, which they've already all been trained on with TikTok. That's why it's not going away. Yeah. I um Do you know what a timeline is for Instagram or Facebook's version of this same thing?

Oh, oh, oh, their timeline. Sorry, I thought you were talking about time the old timeline of like of like when you could choose in the timeline. Sorry, yeah. Um no, so again, Q3 is is when I was told that it was going to happen. So, we were looking out all of Q3 for Meta, right? Like, when are they going to release this? When are they going to release it? Obviously, Q4 they're not going to do anything. I think it's going to be Q1.

Um but that's again me not having direct knowledge yet. Um talking a friend to friends who know. So, um that's that's the hope for me is that that's when they're going to really hit it hard. They already have all the infrastructure, right? That's the good That's the good news. Yeah, the ability to also like integrate this more naturally with with Meta ads, too, I think is is going to be extremely powerful. There's going to be ways in which those things are going to reinforce each other and you're going to be able to see attribution on some of that stuff with setups that are just that are just way deeper than what people You know, a lot of people are going to TikTok having dabbled with TikTok ads, but never spent anything seriously.

And then like Shops is like the first thing they're really getting aggressive about. Whereas with Meta ads, they have these well-established things. And And I could just imagine a world here where And they're already used to reporting, you know, Meta Shops purchases in their ads dashboards and and things like that. Like it I I bet that integration will be really um smooth. I honestly, I think I think it it would make it easy sense for people to kind of integrate that pretty fast.

Totally. The Now, the one thing for Meta ad agencies, and I'm imagining that you have a lot of them that listen to you, is that you're going to have to build the muscle of creator relationships, right? That is the That is the hardest part about all of this is knowing who to go to, and it also is like this funny relationship game because you try and get a hold of high GMV creators, right? So, creators that do $100,000 a month plus on the platform.

Those Those are what we kind of we call like star creators. And how much they are taking home? No, no, no. That's That's in GMV that they're pushing for brands. So, so they're probably Oh, so you're saying yeah, GMV. All right, okay. Sorry. I I Okay, I That was going to be That was going to be some are. There's totally some that are. Like when when, you know, we're paying out on average, let's say, 15% commission, that's still 15 grand a month that these creators are making and all the free product that they're getting.

That's the crazy thing, too, right? Absolutely. these people, these star creators that which we have a ton of in our network, right? That's the That's the thing that we've been building up and really where I think and I'll I'll just tell you it's it's our golden goose because it's so hard to do, right? It's not an easy thing to do because each one of them has between 12 and 1,500 emails in their inbox a day. They have between three and 400 target collabs in their TikTok affiliate center a day, right?

It is not easy to get a hold of them. It is a relationship game. And so, we really pride ourselves on building those relationships with those high GMV creators. That is the That is the real key to all of this. And so, a lot of people are going to have some of those relationships over on Meta, but but somebody who's been focused primarily on Meta content creation media buying is going to have to You're just going to have to develop that skill, right?

Um or you're going to have to buy into these networks or something like that. And And I don't exactly know what that's going to look like. All that I know is we are pouring so much money right now into building those relationships. Like, you know, when when software companies will will take brands out for dinner, we're doing that same thing, that that same motion for creators. Yeah. Right? We're like, "Come on in. Come on in." Jordan, I was going to I was going to say when when are you going to get on your X Shops game slinging slinging affiliate deals on X live selling SAS deals to e-commerce brands?

You know, like that's like the that's like the real next step here, you know? I'm going to have to. Like I You know what? If there is one thing that I do love more than anything, I wish I had time to do more SAS reviews because I like when when we had our when we had our stores I like when when I was when I was a merchant, I had like over 110 apps on one of my brands. Like I just loved it. I would just like test out everything.

I'd always kind of be at the like the forefront of like, "Ah, okay, is this like is this sort of thing going to work?" And then I love giving reviews. So, man, if I could do that for in another life, like that is exactly what I do. X X X Shops SAS for B2B. Like it's it's going to be you're going to carve that out and then you can yeah. Um okay, let's Okay, that's That's a really helpful thing. I think it's I think it's It's going to be the next couple years of e-commerce can be really interesting, I think.

There's There could be a lot of moving around of how things go. And I And my my prediction would be that there'd be meaningful growth of the share of goods bought online as a percentage of total US retail just because these tools are getting better. Like if Apple 11 is real, you know, and if and if social commerce continues to explode, like if both of those keep going, some of that, of course, will eat will cannibalize people's meta you know, spend and and Google search spend and some of those things, but some of it will be truly incremental and a meaningful amount.

And I could really imagine some brands, on top of whatever else they're going to get halo effect wise, could really imagine some brands having some serious tailwinds driven by these big tech companies and these martech companies or adtech companies, you know, basically making it easier for them to grow their businesses faster online. I think I think it's That that would be my prediction right now for where it's going because this has always been the thing in my time in e-commerce that is sort of like hard to get out from under, which is that your next best dollar has been spent on Meta for so long, you know, that it's like it's really hard to find something else, you know?

That That's at least the way that I would view things. I You You can respond to that. I don't know if you've ever thought about that, but Yes. Yes. It Well, the answer is always has always been Meta, right? Like even at iOS 14.5, it was like well, still, where else are we going to go? Exactly. Like Well, everyone like poured money into PMax during that time, and then it was like, "Oh, this isn't incremental. Okay. All right.

Never mind." You know, like it's And And TikTok, right? A ton of people poured money into TikTok, and we just could not find And you couldn't find the incrementality, right? That was the problem is that like it wasn't, whereas we are seeing with TikTok Shop, we are seeing pure incrementality, right? Where is Somebody's not coming to TikTok Shop yet, like search is not built out in that sort of way yet, where they're coming.

They're finding out about products over there, and then they're going Now, we see a ton of halo over to Amazon, right? That is That is the next best channel after Which Which a lot of people would be like, "Well, look at that. There's two non-owned channels, right?" Okay. Well, you You have to sell your products somewhere, right? Retail isn't an owned channel, either. So, and are we going to say that we shouldn't be in Walmart or Target?

Yeah. Like come on. Yeah. There's no such thing as an owned channel. So, yeah. Yeah. Okay. So, let's talk about how to do it. So, for brands right now, let's let's let's let's make up a couple of few brands, and let's walk through them. Okay, let's start with the bigger brand. You You are running a $50 million brand. You're well-established. I don't know, pick an AOV between 1,500 bucks. Pick any kind of customer you want, Jordan.

Like, you know, you can sort of guide me through how to think about this. Um Sure. Let's Let's talk about the classic Meta customer, right? Like let's let's pick a brand that's got a female 25 to 35, somewhere in there. Sure. Great. Okay. Um she's got lots of spending power. I am betting all of my agency's creative resources right now on the goal of going deeper with customers, building tighter funnels, more and better ads, communicating the same angle in a way that is compelling and resonates with the customer.

And that means not only doing it at the ad level, it means doing it at the level of the landing page and funnel experience after the ad. And there is no better tool to do that right now in existence for your Shopify store and for Mote Commerce. Go to motecommerce.com /af. motecommerce.com/af. Right now, I'm working on Mote Shops with a client of mine who when they switched to Mote for landing pages immediately added 50% to their ad spend first of all.

But now we're doing tests where we're not just running these tight advertorial funnels, but we're actually changing the PDPs that connect to those funnels to make it so that now when you click on the advertorial featuring one particular angle from one particular product, you get taken to a a PDP that is custom built, even pulling in specific reviews that feature the benefits that we just talked about in the advertorial, changing the name of the product slightly if we want to to more fully feature the benefit that we're talking about in the angle.

Like building everything about the customer experience around the angle that we're driving. And there is no tool, there is no tool that I know of that allows you to do that more effectively at more scale, faster, and with better pure analytical testing about what's working than Mote. If you are serious about this kind of advertising, you need to explore it. It is an awesome tool. Go to motecommerce.com/af to look into it more today.

Yep. Yep. 25 to 34. We'll even let's even extend it her 10 years. 25 to 44. Somewhere somewhere in there, right? Essentially um uh you know, millennials into maybe is that old is that get to older Gen Z? Anyway, the the that basic age group, okay? So, take those people, $50 brand, well-established brand, profitable, doing well, but it's been all meta, they've heard about TikTok shops, and they're like, "Okay, we we want to get in on this." Uh maybe they have a TikTok account, but it's you know, they're not going viral on TikTok or anything like that.

It's not a well-established thing, so their organic social side of TikTok 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 So, of course, hire UpGrowth. Commerce too. Yeah. Yeah, yeah. Which which I mean, actually plug yourself here.

Like if this is if You should You should talk about who the ideal client is to work with you and and some of that stuff, because I think I think that'd be helpful for people, right? That people don't want to figure this out from scratch. But But tell people tell people um what the 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 TikTok called the global key accounts, so that's brands that are 4 billion and above.

Um that's been that's been a mind-boggling 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 can 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're 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, with 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 let me talk about at upgrowthcommerce.com. Yes. Yeah, go to upgrowthcommerce.com or search me out on LinkedIn. go check it out upgrowthcommerce.com. The link is in the show notes for that. And you can also follow Jordan on X or DMM there, right? Jordan West to come?

Cool. Yeah. Yeah, although occasionally I do I do miss my DMs. Like Taylor Holiday messaged me this morning in multiple times, "Hey, you there? You there? Yeah. I have a client I have a client I need to send your way." Yeah, yeah, great. Yeah, okay. Well, try and DM him at Jordan West to come. All the links are there. So, okay, so that all said Thank you. What do what do they do? Yeah, super appreciate that, Andrew. I'm I'm really here just to give the knowledge cuz 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 .com or in retail on TikTok. It has to be TikTok specific.

So, that could be a TikTok specific product, right? So, you could have a TikTok specific size. It could be a TikTok 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 TikTok has. They understand the halo that they have. That they are sales people for the brand itself and that they're not going to get compensated on anything other than converts on TikTok 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 TikTok 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 TikTok.

And so, they're getting all of this insane amount of of buzz because they're doing these TikTok Shop specific drops. And so, this is what we're recommending, right? It's 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 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, 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.

I was going to say, even if you have to double that ad spend, if it's another 300 in affiliate fees, let's just say, right? You 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. Yep. So, so, 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 GMB 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 TikTok 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 TikTok, right? Like I I yesterday on my agency at our agency, we had Sarah Levenger come in and Sarah is just an absolute master when it comes to talking about um psychology, right?

And she was talking about the psychology of TikTok Shop and some of the color choices that they've made. So, think about some of the color choices that TikTok has made, right? They're not dumb. They understand the colors around that. Use those colors in your products, right? Maybe have a TikTok-specific product that has some sort of color, right? Don't use their branding, but pull some sort of color that TikTok uses.

Um and then have that TikTok-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 TikTok Shop. You're going to have to do it on the other channels as well, right? YouTube is going to be the exact same, so is Meta. How do I identify those creators? So, there are a few different places, right?

So, number one is within the TikTok 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, we've now identified 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 the 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 cuz they're like, "Yeah, 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 a hundred reviews on your product.

Now, did I make that number up arbitrarily? Yes. The reason why I did is just it's just an easy one to remember, right? a hundred sales and a hundred sales and a thousand views? No, reviews. So, a thousand sales on the product, a hundred 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 a hundred 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 uh, 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 TikTok specifically before, make those into TikTok 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? And you're going to find them on TikTok shop affiliate center, maybe places like JoinBrands, 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 hundred 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 than 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 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 them minimum, right?

Normally, they'll do way more than that, but this is the the contract that we have. Then, we also say I understand that contract, you pay $1,500 to a to one creator. That creator gives you 20 videos. Yeah. Exactly. 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 two and five thousand dollars. telling them that when you when you make the exchange on 1,500 bucks for the videos, right?

You're saying, "Hey, I'm going to pay you for the videos, and then I'm also going to commit to putting money behind these videos." I'm going to Exactly. I'm going to 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 it. Great. Yeah. Now, for these videos, 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, It it This is a 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 in business. You should want them to make a bunch of money.

Yeah. Yeah, totally. So, brands will come to me 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% D2C margins. Yeah. Yeah, do you mean landed to the customer? Like, what all are you including in 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, 70 That's 70% margin is a That's a lot of margin.

Uh you you know, I mean, I Most Most brands that we see have somewhere in that sort of range. Yeah. Right? Like, Yeah. I mean, I Yeah, I don't know. After shipping, after everything I'm factoring in there, 70's 70's a lot. That's uh I mean, I I think maybe especially like in beauty, personal care, supplements, spaces there they're all they're all getting up there for sure. Um but that that's specifically those categories a lot of the time, you know?

Apparel's not getting there typically once you net the return rate out. Um Yeah. That's a good point. So, So, doing the calculation for yourself though, just to just go and do it on Chat GPT, 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 at scale. Yeah. Um if you're getting if you can get a three return on ad spend, you you can win.

Yeah, that's great. Yeah. Um okay. Um so, okay, that's awesome. So, uh so, you So, you reach out to So, you get the sales yourself first. And just again, just to be clear on that, once you've got a thousand sales, a hundred reviews, um you're saying that's specifically on TikTok TikTok, right? So, that people can see that there. Is that what you're saying? So, that the creators can actually see how much revenue you've driven, how much revenue that product has driven because they don't want to take a product on and waste their time.

Sure. Okay, so then um okay, so Okay, let's let's pivot over just for a second for this part of the conversation. And let's say I'm I'm like a sub five million dollar brand. I just can't afford to go drive a thousand sales potentially at a loss or whatever, you know? Uh Uh, a hundred reviews on TikTok cuz I'm going to blow money on TikTok ads. It's not going to work. Whatever. You know, um, and I want to get going on TikTok shops.

Should I just wait? Should I be just saying that like or yeah, just wait. Okay. So, so you don't think this is a great play for newer younger brands? I mean, I think that if you like like this would be my strategy if I were to start a brand right now. Yeah, it would be. This is what I would do. This is what I would do to start a brand right now rather than go the Facebook route. Right now? Yeah. Um, to to start a brand and then I would start scaling with Facebook after.

Um, but this is how I would get out there and try and get some virality right away, right? Like think about this. We had a video we had an anti video that somebody posted about one of our brands that got 21 million views in the first day. Probably true. you know how much like Like do you know how much uh, how much media Yeah. like that that costs? That's like a million dollars of media. Yeah, yeah, yeah. Right. You just you're never going to get that on meta, right?

Like and to so for you to spend a million dollars in ads is and this drove just so much business that Yeah, of course, yeah. And it was somebody talking talking bad about the brand? Yeah. Yeah. Classic. Um, Okay, so um, okay, did we get through all all of the things that you would do? Did did I get to did we get to that end of that chain of events? Uh, so it I mean, do you want to go into media buying cuz it's it's Should I if you think it's relevant, I want to give people whatever's going to help them to do it.

Uh, so So Yeah. Yeah. Is there a distinction with TikTok media buying in this strategy relative to what? Somebody's listening to me talk about bid caps or whatever and they're going to go into they're going to go into TikTok and run conversion optimized ads and maybe that's and and they're going to do that maybe with a cost control, you know, I don't know. I don't even know if you can run cost control with TikTok. I never spent on TikTok.

So, yeah, okay, great. So, is that um, is is that the same playbook? No. No, it's not. No, you're going to enjoy this though, Andrew. You've been buying media for a long time. So, you're going to love this. Uh, this is old school Facebook ads. So, we have kind of two different ways to do this. So, there's GMV plus or sorry, GMV max it's called. Um, yeah, GMV max. GMV plus, GMV max, one of those. GMV something. On one side, I don't recommend it.

Now, that is the equivalent of uh, of cost caps. Um, but it's not just the equivalent of cost caps, it's like cost caps meets advantage plus, right? So, when you think about that, except it just pulls all the creative that you're tagged in into it. And you just let meta decide or sorry, you let TikTok decide based on a target ROAS what they're going to serve and it's not very scalable. That's really fascinating though.

It just pulls in I mean, you it sounds like is there any reason not to at least turn it on just in case? Like if you've got a target that you can set I'm going to tell you why. Okay, great. There's a massive reason not to because you can't run the other ads if you turn that one on. You can't run the same product. You can only run GMV max. Okay, that is a massive reason. Yes, so that is a huge reason not to. Otherwise, 100% you'd want to like be testing both of them at all at all times if you could.

So, the way to scale is old school Facebook ad uh, ad set budget optimization one ad per ad set um, scale up as much as you can. Uh, now we have found that there is no amount of scale that you can go to um, where you see decreased performance like the 20% rule. There's nothing like that in with with TikTok that we've seen. But, what we have seen is getting around a thousand bucks a day per creative tends to we just tend to get bad performance at that point.

So, um, we're just scaling a ton of creative at all times. That's what it comes down to when like So, like one this, you know, 1.2 million dollars, I think we ran 1,200 different ad sets that month. Yeah, that's a lot. Okay. It's a lot. Yeah. Yeah. Okay. I mean, one of the things I really appreciate about everything you're laying out is that uh like it would be a lie for me to like clip out this portion of this, put it on YouTube as its own little, you know, short mid-form segment of the show and say like, "The easy way to scale on TikTok." Like it's not easy.

It's not easy, which is great. That that that uh makes you believable, I think. Um almost nothing is actually very easy. Um okay, awesome. So, um so you you want to run that whole thing together. That is great. Um anything else in that chain of events that that we left out? I mean, in there there's just a lot of back and forth. So, you want to make sure you have somebody on your team that is going to be doing a lot of like there's the gifting, right?

There's the back and forth with the creators. There's understanding how to talk to the creators, right? Like what they want to hear, how much autonomy they want to have. They do not want to One thing, if you want to make enemies on TikTok and TikTok Shop, Send them a brief. uh review Yeah, send them a brief and review their video, right? Make them make them review the video before and that's why big brands are having such a hard time because they have these CMOs that are like, "No, we must review everything.

Everything must fit brand." And it's like Yeah. I agree. I'm a big brand guy. Like I mean, you can see like I've got blue and blue and like all of these things like I believe in brand in a huge way, but not in that way. Yeah. Right? Like I really believe give them the freedom because there's there's something special about this platform. And it's not just the platform. It's like this art form. It's this new selling art form that's like QVC has come to social.

That's funny. these people that are phenomenal at it. Yeah. That's funny. It is. It's It's QVC meets MLMs. Uh yeah. Yeah. Meets social. Yeah, right. That's so funny. Um Yeah, okay. That that uh that that really makes sense. That's That's really helpful, Jordan. It's a really helpful breakdown of kind of the way people should be approaching this. Um let me ask one more question about this. What about um the place of of a brand's organic TikTok presence in the midst of all of this?

Like uh how important is it that they are hitting some kind of virality or anything like that with their sort of baseline organic Tik Tok presence? It's just going to make what they're doing better. Yeah. And then and then you can also use the old unicorn method, right? Where you just take what worked already on your organic. Like post as many times as you want on your organic channel, right? Take videos that have been done and repurpose them in some sort of way and repost them, right?

That's the idea on on Tik Tok is this repetition. And repetition of very similar kinds of videos, that's okay to do on your own channel. Like continue to do that if you're okay with that as a brand, right? And the reason why I would be okay with it is like sales. Right? It's just you will go to different audiences and there will be some form of virality behind it and then put money behind those. Yeah. Awesome. Okay, that's that's um it's just so helpful to get super tactical, super clear.

Um Uh we've got just like a couple minutes left. I just want to leave you any other space for anything that, you know, I'm just so green in this area and spent so little time on it. It's part of why I wanted to have you on is just like you just tell my listeners what to do uh uh as opposed to me trying to like sort through my stuff and then tell it to inform them um or tell them for you. Um anything though that we left off that you just think is important to consider here that you think is like top of mind for you with your clients or with your whole consideration of this, whether it's highly tactical or sort of framework about where the world's going, anything like that that we just didn't get to that you want to speak to?

I mean, I'm highly strategic when it comes to to business, right? And so thinking about what to like where this is going to fit, how you're going to fit this into your budgets, right? Who you're going to need on your team to run this or if you're going to outsource to a team like ours, right? Just making sure that you have that planning for 2025. Because if you ignored it for 2024, I don't blame you. I really don't. Like the it it's it's uh it's very scary to get into, but brands will get left behind in 2025, right?

If you're not on social commerce and you don't understand it, you don't build the the you you're not going to um you're going to be okay for a while, but you're going to realize like, "Oh my gosh, this is the new world. It's social commerce." And so, figuring that muscle out, I think is really important, or finding somebody. I'm training a bunch of agencies right now. I have 11 agencies in a in a cohort right now that I'm training to do this because I'm like, "There's not going to be enough people out there doing this." And the problem is influencer agencies don't get it because it's performance.

And most performance agencies don't get it cuz it's influencer. And so, you have to have like both of those together. And and so, there could be some really cool relationships with these two together. But remember, it's performance it's a performance channel first. So, don't think of it like an influencer channel, lean towards the performance side of things, but you have to understand content and influencer to get it.

Yeah. Yeah. Okay. Yeah, it's helpful. All right, man. Thank you so much. Like we said, um there's there's a lot of steps here. I'll I'll just tell you like if I if I had a brand right now that was in a space where I could afford it and could think about what I wanted to do next, hearing you talk, it sounds complex enough that where I would just turn around and just say like, I would hang up this recording and say like, okay, do you have any client space?

Um because because I think that would be like my ideal way to do it. Um uh so, uh if you want to work with Jordan and his team, um again, the link for that is in the show notes to go follow up with him and also to follow him on X where he's putting out all kinds of great content all the time, podcast as well, yes? Yeah, yeah, Secrets to Scaling Your Ecommerce Brand. I think I'm going to keep the same the same name. 600 episodes uh tomorrow, I'm recording my 600th, so.

Okay, awesome. Yeah, no, that's great. Um yeah, so we'll we'll link all that in the show notes, of course, and that way um and that way you can go follow up with all that good content. Thanks, Jordan. Appreciate it so much, man. Thank you, Andrew. Hope you liked that episode as much as I did. And if you did, you should subscribe wherever you're watching or listening right now to not miss out on any more episodes that I've got coming, including a bunch more great interviews, including with Paul from BK Beauty that Jordan mentioned on this show.

There's all kinds of great stuff coming. Make sure to subscribe. You don't want to miss it. You can also follow up with me at podcast@ajfgrowth.com or reach out to me on X at Andrew J Ferris. I'd love to hear from you. See everything I'm doing at ajfgrowth.com. Please do visit from from commerce.com/af and Billy at bily.ai. The links for those are in the show notes. I'd love to follow up with you. Talk to you next time.