In an e-mail to sellers, TikTok U.S. announced it will soon require all U.S. merchants to fulfill orders through the platform’s in-house logistics service, Fulfilled by TikTok, use Upgraded TikTok Shipping, where it controls the labels and carrier selection, or use its new Collections by TikTok, which is a door-to-door pickup service available in select U.S. cities.
Sellers will still be able to use specific approved fulfillment software, such as Aftership or ShipHero, as long as those systems fully integrate with TikTok’s logistics API.
Historically, merchants have been able to sell on TikTok, while still fulfilling the items themselves, or by using their own shipping account and negotiated rates with carriers. Now, starting Feb 9th for new sellers and Feb 25th for existing ones, TikTok is pushing sellers to use its own fulfillment service or buy labels through its platform, at its set pricing.
Adweek wrote:
“This move pushes the platform into a more centralized, Amazon-style distribution network, where TikTok dictates the logistics operation.”
The big difference though is that Amazon actually has its own delivery network and can control the quality and speed of fulfillment from its warehouses to its customers’ doors. Whereas TikTok is fully reliant on 3rd party carriers like USPS, FedEx, and UPS once the item leaves their facility.
There are some upsides to the change for sellers:
- TikTok offers discount rates up to 20% on shipping labels, which could be a savings for smaller sellers. Though that discounted rate was not hard to find elsewhere.
- Sellers will no longer be subject to penalties on On-Time Delivery Rate, Negative Review Rate, and Valid Tracking Rate, given that TikTok is taking ownership of the last mile.
- TikTok also says the changes will offer a faster claims process for lost/damaged packages.
Some brands are obviously inconvenienced by the changes, particularly in regards to fulfillment process and costs, but in the end, they’ll likely reflect the difference in their product pricing, and consumers will inevitably pay the toll.
