6 Secrets Behind TikTok Shop’s Low Prices—and Is It Really Safe?

Since TikTok Shop launched in 2023, many people have noticed that some items are surprisingly cheap. In fact, some businesses sell products on TikTok Shop at lower prices than on other platforms. Sometimes, you can even grab multiple items for just a few dollars. So, why is TikTok Shop so cheap? What’s the secret behind these low prices?

In this blog, we’ll break down why TikTok Shop offers such great deals, whether it’s truly safe to shop there, and how to shop smart on the platform.

What is TikTok Shop?

TikTok Shop is an in-feed feature on the TikTok app, launched in September 2023. Since its U.S. debut, it has generated $363 million in consumer spending. In 2023 alone, TikTok Shop reached an impressive $11.09 billion in gross merchandise volume (GMV). These numbers prove that TikTok Shop is one of today’s hottest shopping trends.

So, how does TikTok Shop work? 

It’s similar to shopping on platforms like Amazon or eBay—shoppers can search, browse, and buy items directly. But there’s one key difference: products are featured in TikTok videos. Sellers either present the products themselves or team up with creators, who feature the items in their videos. Viewers can click the link in the corner of the video to make a purchase, and creators earn a commission for every sale. Beyond videos, sellers also use live shopping and product showcases to display their items and connect with buyers in real-time.

Why is TikTok Shop so cheap?

There are several reasons why TikTok Shop’s products are so cheap. It’s not just the sellers setting low prices; TikTok Shop itself also plays a role in keeping costs down. Here are the 6 reasons behind TikTok Shop’s low prices.

1. TikTok Shop’s business model—cutting out the middleman

One major reason TikTok Shop offers lower prices is its streamlined business model. Compared to traditional businesses, sellers on TikTok have much lower overhead costs. They save on physical store expenses(which can be significant), utility bills, and other fees—all of which add up to substantial savings that translate into lower prices for buyers.

Unlike many other shopping platforms, where sellers often rely on third-party retailers. TikTok Shop eliminates the middleman in most cases. Sellers work directly with manufacturers or wholesalers, sourcing products straight from the source, which keeps prices down.

Additionally, inventory costs are minimal. Sellers don’t need to buy in bulk or store large quantities of stock. Instead, products are shipped directly from factories to customers’ homes, eliminating the need for warehousing and reducing costs even further.

2. TikTok Shop charges a lower commission rate to the seller

One reason TikTok Shop products are so affordable is its lower commission rates for sellers. In the US, TikTok Shop charges a referral fee of 5%-6%, depending on the product category. In the UK, the rate is slightly higher at 5%-9%. New sellers even enjoy a 0% commission rate for up to 90 days, giving them a chance to build their business without extra fees. TikTok Shop also frequently offers opportunities to reduce commission rates further.

By comparison, Amazon charges a much higher commission, typically ranging from 6% to 45% depending on the product category. These rates are several times higher than TikTok Shop’s average 6%.

With TikTok Shop’s lower fees, sellers don’t need to set high prices to turn a profit. This allows them to keep prices competitive while still earning a decent margin.

3. TikTok offers coupons and special deals

Since TikTok Shop is still relatively new, it’s eager to attract as many customers as possible. To do this, they often offer enticing discounts and promotions.

Have you ever spotted a 30% or even 50% discount pop up on your TikTok For You page? These are TikTok-exclusive discounts, often targeted at new buyers. Beyond this, TikTok Shop frequently runs special promotions, such as holiday sales and Black Friday deals.

The best part? TikTok covers the cost of these discounts, meaning sellers don’t pay a thing. This makes it easier for them to keep prices low while benefiting from the platform’s promotional efforts.

4. Low or free shipping cost

Shipping on TikTok Shop is surprisingly affordable. For most products, delivery costs range from $5 to $9—already competitive compared to many other platforms. However, the platform goes further to sweeten the deal:

• Free Shipping on Minimum Orders: Many sellers waive shipping fees if your order reaches a certain amount, which encourages buyers to purchase more and get the best value for their money.
• Free Shipping on Single Items: Some sellers offer free shipping even on single-item purchases.

These shipping options help reduce the overall cost of shopping. Whether you’re buying multiple items or just one, TikTok Shop’s shipping policies keep things affordable.

5. Lower marketing cost

TikTok Shop makes marketing easier and cheaper for sellers. Unlike traditional platforms that rely heavily on paid advertisements, TikTok Shop allows sellers to use in-feed product videos and live shopping sessions. These tools are engaging and cost far less than running big campaigns.

TikTok’s viral nature helps sellers reach more people without much effort. If a video trend or a hashtag catches on, a product can quickly get massive attention. Sellers can also team up with TikTok influencers to promote their items. Compared to other platforms, TikTok creators usually charge less.

TikTok Shop also has built-in features like product tags, which simplify marketing even more. Sellers don’t need to invest heavily in outside tools or services. As long as the content is creative and interesting, TikTok’s algorithm will do a lot of the work by boosting visibility.

6. The E-commerce market is competitive

The growth of e-commerce has made the market more competitive than ever. Platforms like Temu and Shein offer a wide range of options, which means sellers must work harder to grab the attention of shoppers.

According to Statista, by February 2024, 97% of TikTok users in the US had shopped on Amazon in the past 12 months, 55% had bought from Etsy, and 39% had shopped on Temu. With so many options available, standing out on TikTok Shop can be challenging.

In such a crowded market, offering low prices becomes a straightforward yet powerful way for sellers to attract customers. It’s a quick way to stand out from the competition and get noticed by buyers who are looking for the best deal.

Read more: How to Monetize Your TikTok Account: Top 10 Ways to Success

Is TikTok Shop safe?

TikTok Shop currently holds a rating of just 1.5 stars on Trustpilot, raising concerns for many shoppers: Is TikTok Shop really safe? To verify whether an online store is secure, you can check the following factors:

1. Payment method

TikTok Shop supports a variety of popular payment methods, including Venmo, Apple Pay, credit/debit cards, PayPal, Klarna, and Affirm. This shows that TikTok Shop partners with trusted payment services that adhere to strict security standards. To work with these services, TikTok Shop must meet their safety requirements.

TikTok Shop also uses advanced encryption to protect your payment information, such as card numbers and other sensitive details, from being intercepted by third parties. This ensures that paying on TikTok Shop is both safe and secure.

2. Return and refund policy

Customers can return items within 30 days after the shipping status is updated to “Delivered”, like product damage, defects, incorrect items, or late delivery. If the 30-day return period has passed, customers can still initiate a return under Buyer Protection within 90 calendar days.

3. Customer service

If you encounter any issues, the Help Center offers answers to specific questions. If you still can’t find a solution, you can click on “Contact Us” to reach 24/7 live customer support, where a representative will assist you with your concerns.

4. Privacy policy

TikTok Shop has a privacy policy that outlines how they collect, use, and protect buyer data. They gather information such as your name, address, and payment details, and use advanced encryption to ensure it stays secure when processing orders.

Data is only collected with user consent. TikTok Shop clearly states that they won’t share your personal information with unauthorized third parties. They will only share data if legally required or to protect user safety. This ensures your data remains secure while you shop.

Tips for safe shopping on TikTok Shop

While TikTok Shop is generally a safe platform, it’s always good to take extra precautions:

• Buy from trusted creators: Buying from trusted creators who have tested the products greatly reduces the chances of buying inferior or fake items.
• Check sellers’ ratings and product reviews: As a first-time buyer, you might not be familiar with the seller. Checking reviews is a good way to gauge their reliability. Many previous buyers will leave honest feedback, so reading their reviews and ratings will give you a better understanding of the product.
• Beware of Too-Good-to-Be-True Prices: If a deal seems too cheap, it could be a red flag. Remember, price is usually proportional to quality, so extremely low prices might signal a poor or fake product.
• Check delivery cost: Some large items can have very high shipping fees, sometimes even exceeding the value of the item itself. Always check the delivery cost before finalizing your purchase.

FAQ about TikTok Shop

1. Is TikTok Shop legit? Is it a scam?

TikTok Shop is legit, offering trusted payment options, a clear return policy, 24/7 customer support, and strong privacy protections, ensuring safe and secure shopping for users. However, if you suspect you’ve been scammed, please check if you purchased from the official site of TikTok Shop.

2. How is TikTok Shop so cheap?

There are 6 key reasons why TikTok Shop is so cheap:

1. TikTok Shop’s business model—cutting out the middleman

2. TikTok Shop charges a lower commission rate to the seller

3. TikTok offers coupons and special deals

4. Low or free shipping cost

5. Lower marketing cost

6. The E-commerce market is competitive

Final Thoughts

TikTok Shop’s affordability is no accident—it’s a combination of its efficient business model, low manufacturing costs, and competitive market strategies. While it offers great deals, it’s important to shop smart, especially when dealing with prices that seem too good to be true. Always check seller ratings, reviews, and shipping fees before making a purchase.

If you’re looking to tap into TikTok Shop for your own business, Sup Dropshipping can provide you with high-quality, affordable products and hassle-free dropshipping services, allowing you to focus on growing your brand. Whether you’re new to e-commerce or looking to scale, we’ve got you covered. Contact us today.