In its quest to recruit more sellers, TikTok Shop is targeting some Etsy merchants

What to make of TikTok Shop — whether or not to beat it, join it or ignore it — has become a bigger topic of conversation on Etsy seller forums. For the past couple of years, there has been growing frustration among some Etsy sellers over rising transaction fees, along with the increased pressure to run ads or offer discounts. But, there are also rising concerns about how Etsy sellers would perform on a trend-focused, video-focused platform like TikTok. As one seller put it on an Etsy seller forum, TikTok Shop “can be great or do nothing,” depending on how well the seller can create viral content and close their products fit with current trends. 

According to an invitation recently sent specifically to fashion-focused brands, the platform is encouraging merchant to join TikTok Shop to grow their businesses. In the email invite, TikTok boasts its large user base and the influence the social platform has on users’ shopping habits; it cites an internal report showing 83% of users saying that TikTok plays a role in their purchase decision. The email invite also points to one boutique owner who generated $500,000 in sales through TikTok Shop, including $250,000 from live shopping.

The push to recruit more small businesses to sell through TIkTok Shop also comes at a time when TikTok is building tools to turn nearly every piece of content uploaded into a shoppable post. 

“We believe that your Fashion products and brand would be an excellent addition to TikTok Shop,” the invite reads. “Your next customers are on TikTok, discovering new products through the videos and creators they love. Make your brand and products discoverable to the fastest growing community in the world, right here on TikTok.” The idea is for these users to bring their marketing and fulfillment in-house at TikTok, in which they create content and sell their products directly on the app. “Add your products to shoppable videos, product showcases on your profile, and sell via Live shopping!” TikTok states in the message.

One TikTok user who uses her page to drive traffic to her Etsy and Shopify stores suspects that the platform is looking for accounts that promote product links — and is sending those merchants invitations to join TikTok Shop. “I think TikTok is just messaging all stores to see who bites,” the small business owner said. For example, within the same week she received the aforementioned invite to all her e-commerce storefronts to join — including separate ones sent to her Etsy and Shopify shop’s respective addresses.

However, the business owner said there is some hesitation in joining TikTok Shop during its infancy, due to the differences between TikTok and Etsy’s respective models. On TikTok, success on video plays a much bigger role in driving sales.

“The [TikTok] model has you handle the creation of promotional content, sales videos, livestream sales and e-commerce online checkout,” the seller said.

According to TikTok’s terms, the platform will keep a specific percentage cut of the total order amount. “TikTok Shop is currently in the early testing stage in the U.S. and the commission rate will be further updated in due course,” the company’s website states. 

Joining TikTok Shop has raised debate among some Etsy merchants, especially those worried about competing with “Temu-esq” activity on the platform. One Etsy seller on Etsy’s community forums pointed to the contrasting models of the two platforms, saying that TikTok is all about capitalizing on trends; “many sellers on Etsy aren’t competing against whatever the latest TikTok trending items are,” the seller wrote. 

There is also a time crunch element on TikTok Shop that Etsy stores don’t typically deal with. 

“[TikTok is] strict with where you must handle all shipping and fulfillment in three days of getting the order or your shop will be shut down,” the Etsy seller who spoke to Modern Retail said. “That doesn’t mean just print the label, but the shipping must also track within the guidelines.”

The big draw for TikTok Shop is that small businesses or merchants have the opportunity, in theory, to reach millions of users. TikTok boasted more than 150 million U.S. users in 2023; Etsy, meanwhile, said it had 92 million “active buyers” at its most recent earnings report.

Andrew Lipsman, an independent analyst at Media, Ads + Commerce, told Modern Retail that while TikTok is doing a big push to attract big retailers to its e-commerce marketplace, the longterm opportunity is in growing a roster of small- and medium-sized merchants. 

The behind-the-scenes efforts to onboard small merchants also comes on the heels of Etsy encouraging its merchants to bring traffic to their stores from other social media platforms, including TikTok. Meanwhile, “the message from TikTok is to take advantage of the live shopping component and large audience reach,” Lipsman said.

“All of this starts to reveal a desire that TikTok Shop is about building a marketplace,” Lipsman said. Right now, TikTok’s e-commerce influence is largely about amplifying certain products or brands through exposure, he said, “but over time, it will become a go-to for in-app shopping.” 

Even if onboarding becomes seamless enough for any user to leverage TikTok Shop, a big marketplace means more noise. “Content moderation is going to be a challenge as the number of sellers grows,” Lipsman said. TikTok Shop is already facing reports of counterfeits and cheap dropshipping, after helping popularize the dupes of name brands.

At the very least, marketplace sellers have taken notice of TikTok Shop’s growing capabilities — along with the social app’s overall e-commerce ambitions. “I don’t have a TikTok but I know a few sellers in my category that do and are killing it with sales,” one Etsy seller wrote.