Ecommerce businesses should be on a high following BFCM. But sadly, many are living through what feels like a nightmare. These past few weeks have been filled with uncertainty as the deadline for America’s long-looming TikTok ban draws nearer.
By the end of January, roughly five million companies and creators who make money off the viral social media platform could see their livelihoods completely upended. It’s all over an argument most people don’t completely buy and in the middle of a Presidential transfer of power that might change everything.
Let’s go over everything we currently know about the situation and how you can prepare for the potential disruptions to come:
What's the Issue with TikTok?
A potential TikTok ban in the United States is creating widespread uncertainty for the roughly five million businesses and creators who depend on the platform. TikTok must divest from its Chinese parent company, ByteDance, by January 19, 2025, or face removal from the U.S. market.
Concerns stem from allegations that TikTok's data could be accessed by the Chinese government, posing potential risks to national security. This issue is heightened by its timing: just one day before President Donald Trump begins his second term in office.
How Will a TikTok Ban Affect Ecommerce Businesses?
Everyone stands to be affected by a TikTok ban. We won’t know the full implications until there are more details on this platform’s future presence in the United States. But generally speaking, it’s safe for ecommerce businesses to expect the following realities.
Lost Revenue Stream
Many brands rely on TikTok Shop as a primary or exclusive sales channel. A ban could eliminate their revenue stream, erase years of content and customer data, and force them to rebuild on alternative platforms. Some brands have already begun. In an article recently published by the Associated Press, e.l.f. Cosmetics Chief Marketing Officer Kory Marchisotto indicated plans to invest heavily in Instagram Reels and YouTube Shorts.
Reorganizing/Transferring Inventory
Businesses using Fulfilled By TikTok (FBT) need to navigate logistical challenges like transferring inventory and managing fulfillment without TikTok Shop's infrastructure. Those that a third-party logistics (3PL) partner or manage stock themselves will also be tasked with reassessing how they allocate inventory between facilities and sales channels.
Creator Cut-Off
TikTok influencers are a vital source of income and audience engagement for tens of thousands of brands. Shutting the app down means forcing those businesses and creators to find new ways of connecting with one another. Agencies like New York-based Billion Dollar Boy, which was also interviewed by the AP, are encouraging ecommerce clients to start looking for other platforms to facilitate affiliate partnerships and influencer marketing. Although none really compare to the massive network lost in TikTok’s Creator Marketplace, sites like Ufluence, Influee, and Influencity offer secure infrastructure for those looking to organize paid partnerships on other social commerce platforms.
Customer Confusion
Shoppers accustomed to discovering and purchasing products via TikTok will face disruptions, which could result in lost sales and weakened brand relationships. We’re already seeing the For You Page flood with videos from businesses aiming to mitigate confusion among followers.
Even TikTok itself is trying to get users engaged through its own content about the ban:
When Could a TikTok Ban Happen?
The deadline for TikTok to divest from ByteDance is January 19, 2025. Legal battles and negotiations are ongoing. A federal appeals court recently upheld the deadline after TikTok requested to extend it. President-elect Donald Trump also requested intervention from the Supreme Court to no avail. He’s since expressed interest in negotiating a deal with TikTok upon taking office on January 20th. But that still makes a partial blackout likely, as any alternative arrangement will take time.
How Should Ecommerce Businesses Prepare for a TikTok Ban?
Considering the fact that everyone from Donald Trump to TikTok itself has requested to delay the upcoming ban to no avail, a shutdown of some sort is looking pretty inevitable at this point. Whether that decision is temporary or permanent, ecommerce businesses can protect their best interests by taking the following preparatory steps.
1. Backup Your Content
- Download all TikTok videos, captions, and user-generated content.
- Use TikTok’s built-in tools or third-party apps to save content in bulk.
- Organize your saved content by campaigns, themes, or performance metrics for easy repurposing on platforms like Instagram Reels or YouTube Shorts.
2. De-Couple and Diversify
- Expand your presence on other short-form video platforms like Instagram, YouTube, Snapchat, or alternatives such as Triller and Clapper.
- Invest in additional ecommerce channels like Facebook Shops, Instagram Shopping, or Pinterest Shopping to reduce dependency on TikTok Shop.
- Ensure your inventory management system can handle a diversified sales strategy across platforms.
3. Communicate Transition Plans
- Use tools like Linktree or Beacons to provide followers with access to alternative platforms.
- Actively share transition plans through TikTok content, encouraging followers to connect with you on other channels.
- Incentivize engagement on new platforms with exclusive discounts, behind-the-scenes content, or early product launches.
The potential TikTok ban serves as a stark reminder of the importance of risk management for ecommerce businesses. By preparing now, you can safeguard your operations and remain agile in the face of uncertainty. Focus on building a multi-channel strategy, preserving your content, and staying connected with audiences to mitigate disruptions. And above all else, stay up-to-date. The sooner you’re aware of shifts in direction, the more readily you’ll be able to pivot.
While we can’t guarantee TikTok will be around forever, Shipfusion can guarantee top-tier fulfillment performance no matter what digital channels you sell on. Get 99.9% order accuracy and 99.9% on-time turnarounds through a team empowered by live updated and integrated software built to scale. Adjusting to industry changes is easy when you have one of its foremost leaders as a partner. Learn more about Shipfusion’s third-party logistics solutions by contacting us today.
