How TikTok is changing the fortunes of small businesses

On TikTok, newly-founded business owners are going viral — then selling out their storehouses overnight. Where would their business be without TikTok? And are there downsides to being so invested in the algorithm? Guests: Jeremy Kim, Mason Manning, Hayden Rankin, Coral Dayan

TikTok is perhaps the fastest growing social media platform in the world. Now boasting over 1 billion users, the TikTok app is filled with videos of pranks, stunts, jokes, dances. 

But some entrepreneurs have also found TikTok to be a good place to do business. With more than 200 million downloads in the United States alone, chances of TikTok viewers being potential customers are very high.

On TikTok, business owners are making short videos advertising the products they sell. These videos have led to many thousands of views which creates traffic to their other platforms and websites leading to newly founded brands selling out overnight. 

Growing a business on social media can be a tall task to ask but the unique engagement and algorithm — a recommendation system that determines which videos will appear on your ‘For You Page’ on TikTok — has made it possible for many small businesses to be successful. A viral video can jumpstart a business. 

To be successful on the platform you have to be consistent and keep up with trends and hashtags so the businesses can stay on users For You Pages. Businesses like Nectar Hard Seltzer and Nice Shirt Thanks are prime examples of small businesses that have taken advantage of this.

“What makes [TikTok] so powerful,” said Nectar’s founder, Jeremy Kim, “it’s simply that you can have a video and it can get posted — it could get seen by millions of people overnight for zero dollars and that’s what really separates it from everything else. Nothing like that exists on the planet.”

Prior to getting on TikTok, Kim tried to sell his seltzer — his company specializes in “Asian-inspired flavors” like lychee and Asian pear — to more than 200 California stores. At first, no stores picked up his product. . 

But on TikTok, Kim noticed how young users would film themselves singing in their bedrooms, go viral, and then sign deals with music labels. It gave Kim the idea to start using the app to get more exposure for his company. He documented the journey in TikTok videos, and shared his phone number on his company’s profile. He created a way to sell his product.

Kim, who runs his business out of a garage in Culver City, said a TikTok on his company’s profile went viral — and that kick-started their business. Stores began returning his phone calls. Around 650 stores in four states now sell Nectar Hard Seltzer, Kim said.

Mason Manning and Hayden Rankin founded their company Nice Shirt Thanks at the height of the pandemic. They  came up with a plan for a custom t-shirt company that allowed them to blend art and comedy. (One design:  “Giant mega bunny on adventure quested by intergalactic council.”)

Manning and Rankin’s initial TikTok video garnered just over a million views. With the video blowing up, their website and account became flooded with different requests from thousands of people who saw their video. Shortly after, they hired friends and family to help out with the business. They now operate out of a former funeral home in northern Illinois.

Kim, Manning and Rankin said that  maintaining their following on social media platforms  requires consistent posts and demands they cater to trends and popular hashtags.

“The part that we like that really separates [TikTok] from other platforms,” Rankin said, “is that it allows for a more intimate relationship with our customers and that they’re able to show off our products and we ask them to say, ‘Hey …  we’d like to show us your shirts, we’d love to see what you got.’”.

Nectar Seltzer currently has about 52,000 followers on TikTok.

Nice Shirt Thanks currently has a little more than 350,000 followers on TikTok and ships thousands of their customizable products monthly.

Kim, Manning and Rankin said they see the pitfalls of having to keep up with both the latest trends and TikTok’s algorithm.

Manning believes that being consistent on TikTok is much more difficult than other social media outlets because of how seemingly random the algorithm can be.

“It’s one of those apps where it’s harder to keep consistency,” Manning said. He added that TikTok is different from Instagram, “ where the more followers you get, the more consistent engagement you get. [On TikTok], you can get a viral video one day and a video gets not even 100 views the next.”

In order to get the greatest number of views possible on Nectar’s videos, Kim said his company often has to participate in a trending challenge, respond to popular hashtags or music. That can be tricky: How can he make posts that are  about the company — and that make sense — while also following the trends, since that’s what the app seems to want?

“How do I use Nectar? How do I use Asian flavors? How do I use the things people are thinking about in this product into that trend?” said Kim.

When asked where they will be without TikTok, Kim says he has no idea. He was in the music industry but he was burnt out.

Rankin initially saw his t-shirt business as a way to make money on the side while he was studying to go to law school.

“TikTok was just going to be the side hustle that I did during school,” Rankin said, “but that became the only thing I did outside school so I don’t know at this point I probably would have been still studying for my LSAT to go to law school next year.”

This story was produced and reported by Sofie Bredahl, David Reyes and Daniel Sandoval

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