December 8, 2023

Tiktok: When viral hype becomes a problem for small manufacturers

Too many customers When Tiktok hype becomes a challenge for businesses

A seller in Jakarta praises her goods during a live broadcast on TikTok

© Alliance Image/Associated Press | Tatan Sioflana

Going viral on Tiktok means quickly reaching millions of people. However, for small businesses, rapid success can be more than just a blessing. Especially if they are selling directly via Tiktok

A small clip is often enough. Anyone who uploads a particularly funny, sexy, or poignant clip to the Tiktok video network can rack up millions of views overnight. For a company, this viral success of a product often means a large number of new customers. But this can bring its own problems.

“It simply wasn’t physically possible to process the orders with my husband and keep the family going,” says Jessica Sloan.From the insideSlone runs the Bad Addiction Boutique — and it was swept away in a viral hit out of nowhere. The sweater with various decorations of pickled cucumber bowls suddenly became a highly sought-after product on Tiktok. Suddenly more than 42,000 customers wanted to buy the $44 sweater.

Tiktok as a shopping app

She did not sell the sweaters on a third-party platform, but directly on Tiktok. The store function used for this is not yet available in Germany. It has been in testing in Great Britain and Indonesia since 2021, and was also rolled out in the United States in mid-September. Maybe Amazon and its partners don’t have to fear real competition right now. A preliminary analysis by Bloomberg found that the store was not only difficult to navigate, but also somewhat underwhelming with its displays. In particular, cheap goods from China can be found there, according to the business magazine. But also a gem or two that suddenly became a hit thanks to the infamous Tiktok algorithm.

This can quickly become a challenge, especially due to the stringent requirements. Anyone who wishes to run a store through the video application also pledges to deliver after a maximum period of three working days. Not an easy task when you have only sold small quantities so far. “We sell so much every day that we have to stay up day and night to be able to keep supplies for everyone,” marvels Ashley Martinez, who has also been swept up in the cucumber wave. Of course, night shifts also require sufficient inventory.

“We had more than 1,000 orders a day. “That’s great in itself — but you have to be able to produce a lot in one day,” complains Lindsay Shanks, co-founder of the marshmallow manufacturing company. “Otherwise the orders will pile up.”

Risk of viral success

However, building the necessary production and shipping capabilities comes with its own risks. The nature of viral trends also means that they can end at any time – and you are simply left with the extra capacity purchased at a premium. “When things are going well, it can always be an anomaly,” explains Michael Herling, who sells self-sew hats on the platform. “Or it’s just a problem and it will be fixed next week.”

This can be seen nicely with the cucumber t-shirts from Slone’s Bad Addiction Boutique: while some clips have over 30 million views, others have a few thousand. Sweets merchant Hira Tariq can also confirm this. “Sometimes I post a video and the orders go through the roof. But there are always periods when nothing works. It goes up and down.”

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Not just any online store

When it comes to specifications, Tiktok clearly relies on big online models like Amazon, which also insist on fast delivery. Basically, this is understandable from Tiktok’s point of view. After all, customers in online retail now expect delivery as quickly as possible. If you try a new sales platform and find a seller who doesn’t deliver or delivers slowly, you may stop using it.

However, Tiktok is not just an online store – and unlike other sales platforms, it can suddenly unleash millions of potential customers at an unknown retailer. At least initially there is a protection mechanism for this. New traders first have to prove themselves for 30 to 60 days; The platform limits their exposure somewhat during this time frame and limits the maximum number of daily orders. If new merchants adhere to the rules and deliver on time, the restriction will be lifted again.

Close support

In fact, Tiktok seems ready to learn. In Great Britain, the company has already tested mechanisms aimed at reducing extreme volatility. The maximum shipping time is four days instead of just three. The platform offers warehouses and shipping offerings that can provide support in the event of spikes.

The team also supports retailers quickly and easily through direct Tiktok contacts. “When we reach out to them for feedback, they are very interested and very curious,” explains Shanks, the Marshmallow entrepreneur. However, there are doubts among retailers about how long this direct connection will remain viable if business continues to grow so quickly, according to Insider.

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But optimism is prevailing now. “It has completely changed our lives and our business,” says shop owner Sloan enthusiastically, “Tiktok is like a roller coaster ride where the only place we can go is up. We will keep going until the wheels fall off.”

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