644: The TikTok Shop Strategy That Turns $5K Into An Army Of Affiliates With Sohun Sanka

Speaker A: Welcome back to the podcast, the show where I cover all the latest strategies and current events related to E commerce and online business. In this episode, I sit down with Sohan Senka, head of growth marketing at AH Reacher, who has helped brands drive over a half a billion dollars in revenue through TikTok Shop. We dig into the real math behind making TikTok Shop work, from margins and affiliate commissions to why the top 4% of creators drive nearly all the sales and what to do about it. But before we begin, I. I just wanted to take a second to mention that I have a free e commerce community that I'm incredibly proud of and would love for you to be a part of. It is a place where real sellers come together to share wins, troubleshoot problems, and support each other through the ups and downs of building an online business. You can join completely free@mywifequitterjob.com community and I would love to see you there. That's mywifequitterjob.com community.

Speaker B: Now onto the show.

Speaker A: Welcome to the My Wife Quitter Job podcast.

Speaker B: Today I'm thrilled to have Sohan Sanka, uh, on the show. Now I got a chance to hang out with Sohan at Kevin King's Market Masters event and I'm really glad that we met. He, uh, is the head of growth marketing over at Reacher App where he helps e commerce sellers Launch on the TikTok shop and manage creator relationships. And in his career, he's taught sellers how to drive over a billion dollars in revenue by leveraging creators and affiliates across TikTok. And he also runs a podcast called Zero Sum Game as well. Now, in this episode, someone is going to teach us how to grow and scale on the TikTok shop platform. And with that, welcome the show.

Speaker C: Thank you. Great to be here.

Speaker B: So I don't know if you've recovered, uh, from, from Kevin's event yet. It was pretty intense. Uh, I was up like I'm an old man now. So it always takes me a while to recover from these events.

Speaker C: Oh, it's, it's tough. I mean, I've reset my sleep schedule to just be like up at 5:30 in the morning and in bed by 9. So even going to these events sometimes, uh, takes me out of it. But the Terry Blacks, you know, helped me recover quite a bit. So that's my favorite part.

Speaker A: So.

Speaker B: And most of my listeners probably do not know who you are. Um, how did you get started in E commerce and specifically TikTok shop?

Speaker C: Yeah, so my background is quite a generalist background. So I started in paid media doing Facebook ads actually and then worked at a marketing agency where I built a UGC vertical influencer affiliate vertical for Amazon and then landed in a TikTok shop managed service. So I built that out from the operator side, uh, working with brands that are more SMB level and then all the way up to like you know, billion dollar ARR brands as well. And then at that point I was seeing AI growing a lot and seeing the creator economy grow a lot and I was like, wouldn't it be cool to be at the intersect of like both the these things and take my TikTok shop ideas and like create technology that could solve things holistically. Holistically rather than like hacking through things like the marketer way, you know. And so that's how I got into the software space. Um, and now I'm working at Reacher, taking that perspective where you know, having been on the customer side or having been on the operator side and then having been on the software side, helping bridge the gap between current day problems and future solutions.

Speaker B: So this comes at a good time because Amazon is squeezing both sellers and buyers more than ever before. And I know, at least in my community a lot of sellers are looking for alternative platforms. Um, just in your experience, where does TikTok shop kind of fall in the overall strategy of E commerce right now?

Speaker C: Yeah. So in terms of like, if we're looking at things from an omnichannel perspective, I would say TikTok shop is a great channel for new customer acquisition and, and cost effective awareness. I don't think it's going to have the same overall like purchasing power and scale as Amazon. Amazon being the preferred checkout destination. And I think with D2C there's just all kinds of Shopify apps and solutions where you can really get a true like cactus LTV model and, and do a lot of work with getting more LTV out of your customers and driving repurchase rate. Right. But in terms of scaling up with organic creative, testing new ideas and iterating faster to then funnel into paid working and building a creator community, I see TikTok shop as an amplifier uh, to the holistic business there.

Speaker B: Yeah, I've heard reports that uh, when you get something viral on TikTok, like everything goes up across the board and especially brand searches on Google, right?

Speaker C: Yep, totally.

Speaker B: So let's uh, get the audience excited about TikTok shop first and I know you work with a lot of uh, brands. Let's just talk about some big wins first.

Speaker C: Yeah, so I mean big wins for TikTok shop or big wins like the

Speaker B: brands that you've worked with with TikTok shop.

Speaker C: Yeah, yeah. So at Reacher we've been around for like mainly two years and we've enabled people to drive over half a billion in revenue alone. Um, biggest wins. One uh thing recently was a case study with uh Goalie where we, we sort of created ah a unique solution for them where we put them on their own. Sorry the goalie health. Yeah they have the gummies and they have a few other products. Right. So we put them on their own compute where they could send 20k messages per day. Think like 10, 10 automations running and what this allowed them to do was run weekly challenges across like 100,000 creators and just test different angles and run these like creative sprints where they could really just ramp up traffic content and get everything out there doing big ten pull events. And so that was absolutely huge and we've been trying to replicate that so as people grow their creator communities they don't have to hire and bring on more teammates. Right. And they're able to still keep testing very quickly.

Speaker B: So what types of products would you say are good with TikTok shop? And ones that probably should not be on the platform.

Speaker C: Yeah so traditionally what was working around uh a year and a half ago was products in like a 30 to $50 MSRP or strike through price on TikTok shop. Right. That way there was still like room left in the operating margin after you paid out commissions, after you blend in your GMV max, Right after you put in a promotion on there. Um and you could get uh, they had what was called like a free shipping subsidy. Now it's like co funded shipping so orders over $30 got a shipping incentive. Right. So you had room there to give back in your promotions and commissions to creators. Now what we're seeing is that that AOV is increasing. You know people are launching more things like bundles for higher price point products like ice cream makers for instance that might be 200 bucks. People are getting way more into live selling and they're doing giveaways and they're really getting creative with how they're selling these products. So that range of price point is opening quite a bit. I would say your product still does need to have a differentiator, it does have to have a story. I will say products that are organically talked about by creators like that you can find via social uh listening tools.

Speaker B: Right.

Speaker C: If there's like certain trends around summer with making ice cream, I don't know Why I keep using that example. Right. But ice cream recipes. Right. And you know, this is a great time where people are looking for ice cream makers. Uh, you can contact those creators, get more buzz around a viral trend and then launch thereafter. But if your product is not very differentiated, if no one's talking about it, if it's very like it's on the premium end and you know, you don't really have any angle besides like we're eco friendly, like that might be a tougher uphill battle for you.

Speaker B: Walk me through. So you just gave an example of like a $50 product. Um, what are the margins that are expected to just make this work on a dollar fifty.

Speaker C: Yeah, yeah. So it depends on your goal. I would look at your like blended, blended LTV and what your goal is with having TikTok shop as a channel for some brands who want to have TikTok shop as a profitable channel, maybe you want to hit, let's say I'm um, making this up like a 30% operating margin. Right. What comes out of those costs are, uh, TikTok has a in platform fee, like a referral fee where they take 6% off of every sale. And then you have your creator commission that can be variable. Right. You have your general commission and then you have your VIP commissions that you give to other creators. And then I like to also give

Speaker B: me a range on the affiliate payout that you've seen.

Speaker C: Yeah. So it depends on the product category, but let's say 20%. 20% on a $50 product is $10 in commission.

Speaker B: Okay.

Speaker C: So let's assume $10 in commission. Let's assume a $10 limited cost.

Speaker B: Right.

Speaker C: So that's COGS plus shipping.

Speaker B: Right.

Speaker C: That's about $20 there. Right. And then if you also want to have a coupon for maybe another 20% off or 15% off, I'm making this, uh, up some number that gets you like $25. Now you're sitting at like a, you know, 50%. And then if you want to blend in your ads fee. So GMV Max does things on an ROI calculation, not a ROAS calculation. So they're blending everything together there. So you have to be very careful and leave a little bit of cushion in your margin for those kinds of things.

Speaker B: I just wanted to take a moment

Speaker A: to tell you about a free resource that I offer on my website that you may not be aware of. If you are interested in starting your own online store. I put together a comprehensive six day mini course on uh, how to get started in ecommerce. That you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now this course is free and and can be attained@mywifequitterjob.com free. Just sign up right there on the front page via email and I'll send

Speaker B: you the course right away.

Speaker A: Once again, that's mywifequitterjob.com free.

Speaker B: Now back to the show. No, I was just gonna say. So it looks like at least a 4 or 5x margin gross margin, product cost. Okay.

Speaker C: If you're running it. Well, I think um, as you're getting, as you're launching, you need to be on the upper end of that range to be competitive within the category.

Speaker B: Okay.

Speaker C: Um, you can build incentive structures from your remaining margin to hit scale and incentivize your creator communities. During the earlier days, I wouldn't try to hit like a 33% operating margin. I would try to like slim your margin if you're not working with an agency and blending in their fee.

Speaker B: Right.

Speaker C: I would try to like slim your margin down to like 15% just to scale up and do whatever you can to get to like 100k, uh, in GMV. Right. And then from there affiliates will look at your product as a product that's likely to sell and they'll want to work with them. And then you can sort of taper that margin back a little bit on your commissions, your promotions. Um, because what you don't realize is affiliates go through a product selection process similar to how Amazon sellers use like Jungle Scout and all these other tools like look at search, volume and ranking and they're evaluating your product as an opportunity cost of their time. So you have to essentially burn cash and get as close as you can to making your product look like a dark horse where it's fast growing but it's not so competitive. Like you know, like let's say a goalie. Right. Where like any affiliate knows there's already top affiliates there. Just like taking all the attention.

Speaker B: Right.

Speaker C: And taking all the GMV max budget.

Speaker B: That makes sense. Uh, from a product perspective too. Are you seeing that almost or most of your clients are selling something that has repeat purchase value like consumables. Can you make like a one and done work on TikTok shop?

Speaker C: Yeah, 100% I think. Even if you're selling like subscription, uh, personally, like as a marketer, I wouldn't launch, I'd rather capture that purchase on D2C just because I get more data into the customer demographics, the purchase history. I have like way more tools I can use with like email and SMS to like drive up that repeat purchase. Right now, product subscription on TikTok Shop is also just not very customizable. You can't select the variant you want people to purchase on. It's just like general towards like the listing. Um, but yeah, one and done products do work really well, I would say if you're like, let's say you're running an organic first strategy where you're posting a lot on TikTok Organic and you have a lot of buzz there for sure. You know, run a product there, use that awareness to, to skyrocket sales and then think about capturing the excess on Amazon.

Speaker B: Okay, Right. So you're depending on the halo effect in this case. Right. Not necessarily the product profits from like the TikTok shop sale, uh, at the beginning.

Speaker C: At the beginning, yes. I mean, like, it's, it's just a battle of like, you have to get your product into the eyes and recognized by the ecosystem first. And that involves just not being profitable a bit at the beginning. Or being break even is a better word to say.

Speaker B: Okay, so walk me through the process of building and managing affiliates and let's assume that we're starting from scratch at first. Sure. Okay. So I understand you need to, uh, hit a certain threshold to even be able to message affiliates, right?

Speaker C: Yep.

Speaker B: And then what, uh, are the steps after that?

Speaker C: Yeah, so after you get over hurdles, there's like various hurdles based off of GMV. Let's say you get over $2,000 in the last 30 days. Okay. There's a lot of different ways to get there. You can use like Silico Launchpad, you can use like join brands, TikTok, Shop Blast and have creators buy off your initial listing to skyrocket. That can skyrocket that value. You could have a employee purchase those. Right. So let's say you get after that. The first thing I would be doing is just putting together a creative testing plan and figuring out who you're messaging to. Uh, let's say you're a brand that is on Amazon. Right. Maybe reading through like all your Amazon reviews and figuring out what customers are saying about your product, looking through your demographics and figuring out who is like a Persona we'd want to talk to. Right. Keeping that in the back of your head.

Speaker B: Right.

Speaker C: And then the first thing I like to do is start very top of funnel. I know it's like very counterintuitive because most people would be like, hey, let's just go target our most valuable customer segment on TikTok Shop immediately and then just try to angle on to them because we know it works. But fundamentally with TikTok shop, it's not the same as Amazon, where people have a certain degree of consideration where they're searching for products and then evaluating the cost benefit between different competitors. Right. People are just scrolling, aiming to be entertained. But what we know is that if someone sees your broad top of funnel content, let's say we're talking about electrolyte powder, for example, Right. And you're creating broad top of funnel content around the conspiracies of dehydration and that gets people entertained. If you start serving them more broadly content around dehydration, then maybe you can angle that later, you know, on your third video to like dehydration for women, you know what I mean? Or a woman who are breastfeeding. And then there's some stuff in our electrolyte powder that helps them replenish their nutrients or stay consistent there and then sell them later on the third to fourth piece. Right. So we want to target affiliates who can just help get awareness first and start getting an audience sort of interested in our content.

Speaker B: So interesting. So you're saying for like your first of affiliates, you're not even trying to sell your product, you're just trying to build awareness around the topic.

Speaker C: Yeah, because your product doesn't have that much units sold, it doesn't have that many reviews. There's not much really credibility behind. And so I think it seems a little premature to like just ask for the sale early on, you know.

Speaker B: Why would affiliates want to do that then? Because they're probably thinking that they're not going to get that many sales.

Speaker C: Right, Totally. It definitely does make sense. Like I would say you can work with creators on a retainer basis, build a relationship up with them first and start with like a smaller creator community. Right. Because you do. If you really want to have an army of like thousands of affiliates selling for you, they have to like, it's like a catch 22. They have to see some affiliates really engaged and really taken care of in the community and really starting to see some upside before they even commit to you. Um, so I would start from there and focus on like motivating people through awareness and engagement, giving out some sort of cash reward or incentive system and you know, you'll make that backup on the back end when you look at your blended LTV in terms of like how cost effective that Awareness is how many new customer segment eyeballs you're getting on your products and that might halo over onto Amazon too.

Speaker B: Interesting. Okay, so you're, you're basically paying your initial affiliates to post content in the beginning because you don't have any credibility or numbers in the beginning, right?

Speaker C: Yeah, I would recommend so. And you can still seed out samples and you should always be like seeding out samples to find new creators. But your ideal creator that you want to work with when you just start off on TikTok shop is probably not going to work with you want to work with you. Unless you have such a unique product that really connects to them.

Speaker B: Right. So I read somewhere that the, there's only a very small fraction of a percent of people, maybe even less than a percent of affiliates actually drive real sales and most of them just don't, don't even make any money. Is that, is that accurate?

Speaker C: Yeah, I actually just made a post on this recently where we analyzed 3.3 million creators and I tried them out by GMV. So I'm happy to share those numbers with you right now. Just let me pull it up. Yeah, it always, it always, ah. Because you won't believe when I get on calls with sellers, they're like, let me just reach out to creators who make 10, 10,000 GMV. And I'm like, dude, it's like 0.06%. Um, is it really? Okay, here's the stats, right? So 16 of creators make over a dollar in sales and then 4.6 creators make over a hundred dollars in sales. 2.3% of creators drive over 500 in sales. 1.6 creators. 1.6% of creators make over a thousand in sales.4% drive over 10k in GMV and then.09% drive over 50,000 in GMV. And this is done on a like last 30 day basis looking at the entirety of the creator pool.

Speaker B: Okay, see that doesn't sound favorable to me. So and that means like there's, there's like a elite pool of a affiliates, right, that are driving most of it. So that implies at least to me then that uh, you need to tap into those guys in order to make any money on this platform with TikTok Shop.

Speaker C: Well, I think that's sort of like a, like there's two ways of looking at it, right? So I think one thing especially talking to Amazon sellers is like looking at the long term ROI versus the short term roi. When I see a distribution like that, that tells me that there are tons of neglected hungry creators that who are willing to work for me at uh, twice as hard with like maybe a fifth of the price that like the top GMV ones would make. Right. So if I turn them into my loyalists and I turn them into real ambassadors and I create systems that reward awareness, that reward participation in my community, I should have a very scalable model six to eight months down the line where I can just keep adding newer and hungrier creators into there. And that's really the vision that I see working best for brands and agencies who are trying to layer in community as part of their strategy there. Granted, you might not get short term ROI up front, but if you go and try to poach the affiliate that has the highest GMV and they're getting flat fee offers, they're in 10 creator marketplaces, they want to work with the goalies, the nellos and everything. Realistically, how much would you pay to coach them versus how much would you pay to nurture longtime ambassadors? I still think it'd be cheaper than to invest in longtime ambassadors than poach those creators.

Speaker B: Okay, so that makes the problem a little harder. So how do you find these people then that could potentially become long term gold mines later on because they're not in the beginning. Right?

Speaker C: Yeah. So I would say for that you should do some preliminary product research. I would say before you even launch your product on TikTok shop, you should try to figure out are people talking about problems around my product. Are there other products doing well? Right. Doing basic research using a tool like Calidata or Fast Moss or Reacher. Right. And you're beginning to see like it's sort of like a social listening slash Competitive analysis for TikTok shop. Right. Is there market potential? And then based off of that, I would find creators that are just most relevant to your brand and problem. I think looking at relevance first over GMV and performance is the biggest point. If someone's making a lot of views and they're in a relevant niche, you can coach them on how to sell your product well with your historical data. Right. And so I would be looking for a ton of those dark horses there based off of rising products creators and things like that. And then you plug in a tool like Reacher where we can send like 10,000 outreaches a day and you play the volume game and you funnel them into your community. That's how I would go about the outreach and acquisition.

Speaker B: So what you just said kind of contradicts. You, uh, know, it doesn't contradict, but like, if you're going through and looking for these Creators. That implies that you need to find like, in order to blast 10,000, you need to find 10,000, right?

Speaker C: So sure, you could use like filters and like, look at like we have our entire database labeled, for example, right? Where it's like, let's say I'm making this up. Um, I want to find creators in like the health category who post 80% of the time when they're sent products and they make over $100 in sales. I can start there, right? Or I can use an AI powered search to see what kinds of keywords people are using. Like, let's say I'm a health gummy and I'm looking for creators that are always talking about inflammation. I could type in keywords like inflammation, or I could look at things like maybe like gut problems or bloat, right? And. And then I could find creators that are talking about that and then shortlist and then automate to the culmination of all those shortlists together. So there are ways to like speed up that process and go broad. And then for the highest response rate, what I would do is in your hook, say, hey, we're offering a retainer opportunity, right? So you can still layer in the quality of the offer with the quantity of the outreach just to maximize, uh, during that uphill battle of starting your TikTok shop journey.

Speaker B: So when you're doing this search, uh, it sounds like you're trying to target affiliates that don't have a huge audience yet, right? Uh, according to your strategy, right?

Speaker C: Uh, yeah. So. Oh God.

Speaker B: I was gonna say, uh, can you give me like a typical outreach email that you might send?

Speaker C: Yeah. So what I would do, one is lead in straight with your offer. Like, I would want to almost see like something in the preview of the inbox that says like retainer opportunity before it cuts off in the dot, dot, dot, that gets me to open. And then after that hook where I outline the offer where it's like retainer amount, or let's say you're a brand that ran like a, uh, $70,000 contest last month. You do something where it's like, hey, we gave out 70,000 in cash and prizes to our community last month. We'd love to give you free product commission and an opportunity to take a share. Our top affiliate made $10,000, you know, um, something like that, right? Just give them the dream outcome, you know, sell them on working with you and then showcase your brand as a product that's likely to sell. So affiliates can see the number of sales on your product card when you Reach out to them, which is basically just, you know, this, this card that shows like your product, your price point unit sold. Right. And then I would showcase if you're a brand that's like an eight figure brand, I'd be like, by the way, we, we just crossed 10 million in sales. Uh, we're growing 50% year over year. Our products absolutely crush it for X, Y and Z reason that comes in after. So it's your offer then it's your credibility. Like why should people even be listening you, why should they work with you? Right. And then you can have like a little bit of background. Frankly, I don't think affiliates care. I think they operate more as like salespeople, especially when you're starting the relationship, little background. And then I like to add a personalized signature where it's like hey, Dash Sohan, founder of Blah Blah Gummies. You know what I mean? Something like that.

Speaker B: Right.

Speaker C: That's like my overall like message structure that I like to use. Of course there's like a ton, ton of variations and ways you can a B test and multivariate test this. But for cold start sellers I would stick to that structure.

Speaker B: So given that, uh, it sounds like 90 something percent of people aren't making any money at all. Do you need to bribe them with a retainer or will do. You are, ah, you find that most people will just accept a free product.

Speaker C: Yeah. So it depends. Um, when you filter that number by post straight the percentage of those that you know, get those products, it's even smaller. But I would still say like 1.6% of like 3.3 million is still way more samples than you're ever gonna send anyways. Right. So I think looking at the percentage can be a little misleading. I think looking at the cumulative number starting from there would be your best way to go. Um, I guess that would really depend on like how much product someone really has on hand or, or how aggressive their strategy is going to be.

Speaker B: Can you talk about the post rate number? Like what do you look for?

Speaker C: Yeah, so I typically look for 70% plus. Um, you can filter by a good rule of thumb is actually to filter by 50% plus and then based off of the people who actually request a sample, you can do like a loose 70% where it's like if they're 50% but they sell 10,000 in GMV, am I going to say no to them? Like probably not.

Speaker B: Of course not. But that's 0.06 of the uh, population there. Right?

Speaker C: 0.06. But, but you'd be surprised where it's like if you filter by post rate and by gmv, then that pool gets even smaller. So it's more of like an and or situation. Right. Where it's like if I have my post rate filter a little bit lower, I leave more room for the people that have high GMV and lower post rate. And so I would go 50% plus. If you're getting a pool of like smaller GMV creators coming in, then maybe you're more strict on 70% plus post rate and you accept 60% of the applicants that come in. Right. Based on that. Again, I'm making this data up.

Speaker B: No, of course. Yeah, I know we don't really have a concrete example here, but post rate is the percentage of people who actually post a video after receiving a sample. Is that, is that accurate?

Speaker C: Yes.

Speaker B: Okay, 50 seems really low. I didn't realize that the numbers that there's a large fraction of people who actually get something and don't post anything. That just seems wrong to me. Almost.

Speaker C: Well, it's similar to product seeding. I would say if you're doing general product seeding campaigns, getting a 50% post rate is not bad. Um, again these are based off of industry averages of people just being like, hey, I sent a very AI powered message to you and I'm selling everyday product you already see when I'm making no effort to make a connection with you at all, or not not jumping on a call with you, not making it relevant to, to what you do as a creator. And you know, some people might just forget to post because they're not as just connected with the brand. It's happened to me. I've requested some samples through my affiliate account and I forgot to post. And I spend like every day helping sellers get their post rate up. So sometimes it's also just an honest mistake where they miss that 13 day window and they might need a reminder later or might not have a connection with the brand.

Speaker B: Okay, so can you walk me through the percentages and let's just keep it simple. Uh, for let's say you message out a hundred people, what percentage of people typically respond to that template that you just gave?

Speaker C: Yeah, I would, I would use like 1 to 3% for, for cold starts. Um, the rule of thumb also is like, let's say maybe like and then maybe let's say like 50% of those 1 to 3% actually request a sample.

Speaker B: Okay, so we're talking like 10 samples out of a hundred and then how many of those? You said 70% so maybe seven. You're getting seven videos. When you mention a hundred videos. Sorry, a hundred people. Okay.

Speaker C: Yeah. And then 10 to 15% of those videos generate ROI on the first go around. That's usually the rule of thumb.

Speaker B: Okay, so you might get one less than one from messaging out a hundred people. Okay. All right, so let's just talk numbers here. Let's say you're a brand owner and for the most part my audience is mainly seven and eight figure people. So, um, what's my budget for this? Like what, what should I be willing to give away and, and spend in order to see this through the right way and actually eventually make a profit?

Speaker C: Yeah, so budget on a monthly basis or off of like a project basis for launching your TikTok shop on like three to four months or something like that?

Speaker B: Well, uh, one, I want the time frame and then what the budget might be, uh, assuming like a, A gali or whatever or a, uh, you know, supplement business. Yeah.

Speaker C: And are these people trying to build a creator community as well?

Speaker B: I think the goal is for them to create an army of affiliates that sell for them.

Speaker C: Got it. Okay, that makes sense. So I would say like, let's take a budget of like $5,000 for month one.

Speaker A: Right?

Speaker C: Okay, let's just, let's just say that. So I'm assuming like for sampling, if I send out 500 samples, I'm going to assume that's a $10 landed cost. Right.

Speaker B: Okay.

Speaker C: So if we know that I send out 5,000 samples, let's say, or let's say 250 posts and then let's say like 15%, uh, or sorry, let's say 15% of those actually post. Um, and then 10 to 15% are ROI generating videos. You're ending up spending around like $200 per ROI producing video. Right. Which doesn't seem like a lot more or less. I would say going with a hybrid approach and getting retainers in here where let's say you're doing $200 for like 20 videos posted. Right. And there are TikTok shop creators who will do that and marketplaces that will help you get that level of, um, volume. I would say that's a better way to go. So let's say five, $5,000, $200 per 15 videos. I think that's like about 375 pieces of content. If you divide the math up there. Um, 375 pieces of content. And if all these creators are in a community where they're posting multiple times, you then have the Advantage to tell them, hey, this didn't work from post one. Try this in post two. Or hey, post two and three are great. Keep that hook. But try this different selling point for a new audience. So I can squeeze way more juice for each piece of content that I know is guaranteed to be post posted from a retainer and test more angles. I'm going to stop there and just make sure.

Speaker B: Yeah, uh, okay, here's, here's my disconnect with this. Let's say I post something and it doesn't do that well, I'm not going to post again. Right.

Speaker C: Like, but if you pay, if I pay you 200 bucks for a retainer.

Speaker B: Oh, I'm sorry. Oh, I see. What is it? Can you define the retainer? Is it constitute multiple videos or just one?

Speaker C: Yes. So I owe for TikTok shop affiliates, it's always bulk. Just because it's different than influencer marketing, where an influencer marketing you're trying to capture a percentage of their audience. But on TikTok shop, about 80% of users. And this is from a, uh, survey done by Power Digital State of the Media report. Right. About 80% of the users spend their time on the Discover page. So it's all about creating quality content to, uh, attract new users. Right. And so with that we're going to need multiple iterations to get there. So I always do retainers on like a 15 or 20 video basis. Um, because that leaves me enough room for volume and testing more angles and running challenges and things like that.

Speaker B: That's okay. So I'm a TikTok creator myself. I don't have a huge presence, uh, like 120,000 or something like that. Like if you. Someone offered to pay me 200 bucks to do 10 tick tocks. Hell no. Right. Um, unless I'm seeing some sort of affiliates with that. So are you paying that retainer to only the people who. Only the ROI positive guys, or are you doing it right off the bat up front?

Speaker C: I would do it right off the bat up front.

Speaker B: Okay.

Speaker C: Um, because you're not going to know if your first batch of creators produces any sort of roi. Right. But you have to take some sort of risk and I would argue the number of videos you get guaranteed to get is still higher than seeding $5,000 in product. Right. Or 500 samples. Um, so just on like a per video basis, the risk is lower.

Speaker B: Right.

Speaker C: Um, so I would start there. And, and it, it does feel like a lot lower than traditional influencer. But uh, you gotta understand these people are posting dozens of TikToks a week. Like they're always selling, they're always flooding the content or flooding the algorithm with more content. So they have a different perspective on, on what volume really means.

Speaker B: Interesting. Okay, okay, so let, let's assume that you get someone to create multiple ones and what are the expectations on like what's considered a, a good video?

Speaker C: Yeah, that's, that's like a very, that's a very complicated question because I don't have TikTok's, uh, algorithm in front of me. I think there's like basic video hygiene where it's like, are you filming in the correct location? Well, I don't need that.

Speaker B: I mean from like an ROI perspective.

Speaker C: From an ROI perspective, I mean it's, it's, it's pretty much if it's just from an ROI perspective, it's like what, what generates sales, I would say. Or it depends on how much you're, you're paying the, the creator in commission, how much ads you're running. Right. But I would say there's two things. Like one, you need to test multiple different angles. And testing through multiple different angles has a value in itself. Right. Because if you get that one video that creates ROI and you take losses on the first, let's say eight to nine videos with incentives, sampling costs and GMV max budget, that video can scale like a 3 point ROI, 3.5 ROI on GMB Max and make up for all your losses. Or then you can run that video to meta ads. Right. And then you make up the incremental roas versus your existing creative there. It's like that's how I would look at it. Rather than like, hey, what is the ROI on a video by video basis? Because otherwise you're not going to hit the volume. You really need to like scale up, uh, and invest in the creators. And if you're too focused on the ROI per video, it's going to make creators feel like you don't really want a relationship with them and you're just using them for short term roi.

Speaker B: Right. Are you running GMV ads on everything that comes out?

Speaker C: Yeah. So GMV Max automatically picks up every single video the TikTok shop link if the creator has their authorization turned on. It's different than like a, a spark ad where people put like give the string of characters and letters with a certain period, uh, of time that they've authorized that to do.

Speaker B: I see.

Speaker C: So it'll automatically pull it in and it tests like 500 or so creatives a week maybe, plus depending if you're in some alpha program there.

Speaker B: Okay.

Speaker C: And then from there, you know, it cycles through it fairly quickly. It prioritizes ones that have generated a dollar in sales, aka have sales potential from TikTok standpoint, and then keeps putting more budget on there.

Speaker B: I know it's really hard to give numbers on these hypothetical case studies, but what is considered a good return on a GMV ad that you run so

Speaker C: you can actually set the ROI target on your GMV Max campaign before you start it up. So this is where your, your margins and your omnichannel strategy sort of comes into play. If you want to start at like a 1.8 ROI or 2 ROI, after you pay all of your in platform selling costs and your sampling costs on an individual video, you're essentially breaking even or taking a loss there. But you're willing to scale up and flood with content because you want to just get volume and you know that you can get credibility and then scale that up to like a ah, 3.5 or maybe uh, a 3 where you know you are taking home some profit and you've lowered your commission. You blended in your GMV max where like you're blended in your GMV max budget into your unit economics calculation where that is starting to make sense. So 1.8 to like 3.5 later on.

Speaker B: Okay. I guess what I'm trying to get at is uh, are brands doing this just for the halo effect and just breaking even on TikTok? Is that the general strategy or is it actually to. I know everyone wants to make money on TikTok, but in order to implement this, I imagine there's like a tipping point where you get a ton of affiliates and everything just kind of happens by itself organically. Uh, are people just shooting for that point at? No mean, you know, at, at a loss and just hoping for the halo effect. Like what's the uh, what's the main strategy that you, that you use when you work with brands?

Speaker C: Yeah. So, ah, at a certain point you have to measure the ROI of your community. Right. Let's say everyone's trying to get to this goal of having a thousand affiliates on standby who produce 10,000 pieces of content a month. Right?

Speaker A: Right.

Speaker C: You have to spend to get there. You have to spend in investing in the wrong affiliates and sending out products. Right. And eventually if you're able to create this model where I only need to send out one product and every, like, let's say I'm a consumables product. Right. Where I need to replenish that on a certain frequency. Right. If I'm able to send one product and get more videos from each creator, and then on average my creators convert like 10% off of like the 15 videos they make. And that makes up for all my costs. And I don't need to spend a lot of money on cac, like seeding products, running commissions and promotions to get new customers. Like, that's the point where I want to get to. And then even if you don't have ltv, you know that every single dollar you spend in Creator Community gets five to seven dollars out. Like that's where you want to be. And people can for sure make money on TikTok shop. Is it going to be like the same level of like, hey, I'm willing to spend the entirety of my MSRP to acquire a customer because I know they're going to purchase five to six times on meta. Like, is it going to be that level of a calculation and that nuance? No. But does community still work in the long run if people get there? And can they make money on TikTok shop? 100%.

Speaker B: Okay, let's shift gears a little bit and just talk about like all the management here. I mean, you've been throwing out some big numbers, like messaging, 20,000 effects affiliates. Like, is this all automated? Like how I know your platform does this? Uh, how do you manage all those creators?

Speaker C: Yeah, so there's automations during outreach, but then there's also like a CRM. Right. So let's say you message a creator and you approve them for a sample. We'll read within TikTok Shop Seller center for which SKU that order has been processed. And you can automate personalized creative briefs to go out for that sku. And you can variate this across the entire catalog you're sampling without a human delineating between which product we're seeding to which creator. Right. So that's already a ton of time saved. And then once that sample has arrived again, we're reading that status in TikTok Shop Seller center, we can automate reminder messages, just nudging them to post, you know, throwing in extra incentives if we need to remotivate someone. And then once they actually post, we can segment based off of gmv. So if we want to find every creator that generates over a hundred dollars and send them an invite to our discord, you know, with an, uh, exclusive community offer, we can automate the recruitment of those creators into our community as well. So we're pretty much automating the end to end. And we're really moving marketers time to focus more on analyzing the holistic data, looking at our creatives and figuring out which ones are working and not uh. Is this creator profile profitable for us after running community for two to three months, like how am I doing? How are my top creators doing? Let me get on calls to them. Um, we're reorganizing marketing marketers time from just general affiliate management to those sorts

Speaker B: of tasks There, I see, so you're automating the majority of everything and then maybe like your top guys you'll invite to your Discord community and then communicate with them one on one there, right?

Speaker C: Yeah. So, so top guys at the beginning, discord, sure. And then as your community grows bigger, all ah, all the top affiliates are kind of going to be like princesses, like they're going to want an individual text, they're going to want you to like take them out for dinner, you know what I mean? But, but yeah, you should spend the majority of your time talking to those people and doing things that AI and automation like, you know, can't really replace. Like I would say VAs for recruitment is really like no longer needed.

Speaker B: You know, I assume that majority of these people will hit reply. Right. So when they hit reply to an outreach message, for example, um, is it just a canned message back?

Speaker C: Yeah. So this is one area where it depends on how you do your outreach. Are you familiar with like the target collab versus open collab sort of nuance?

Speaker B: No, I'm not actually.

Speaker A: Yeah.

Speaker B: You wouldn't mind defying that?

Speaker C: Yeah, of course. So basically there's different ways you can reach out to affiliates. One is just a message where you send them a chat through seller messages. Right. And then they have to go find your product on what's called a product marketplace and then request a general commission. This is typically affiliates least favorable one to do because they have a quantity of sample requests they can use per month and the general commission is usually the lowest commission offered. And then there's what's called a target collaboration which is usually a higher commission rate than what's available in the public. And this actually doesn't start a chat with the creator, it's sort of like a one way email where you can just click the SKU you want to uh, earn commission on and then request a sample. So that doesn't actually open up a chat with the creator and that's the creator's preferred type of invitation type.

Speaker B: Okay.

Speaker C: And then thereafter you can enable a follow up message to go out with that within reacher to improve response rate on both ends. But we have an AI chatbot with knowledge base, right. Where it's like, hey, would love to learn more details about this offer if you have a stored response to that.

Speaker A: Boom.

Speaker C: Right? What is the typical time my sample is going to arrive? Once you guys, um, approve me. Boom. You can incorporate that. Right. And you can keep adding the most frequently occurring questions into that. And then you can automate like 80% of your responses and give 20% to a customer support rep who also handles your customer messages on the platform too.

Speaker B: Okay. And from the creator perspective, let's say you have an audience, but you don't have never done this before. Uh, how do you get noticed as a creator?

Speaker C: So you're assuming a creator is not a TikTok shop affiliate or they are a new TikTok shop.

Speaker B: A new TikTok shop affiliate.

Speaker C: Yeah, yeah. So typically if you're a creator and you're not getting noticed right now, there's a lot of different ways to go about it. You can sign up for one of many creator marketplaces where people are putting out jobs, kind of like an upwork. Right. You can apply into there and then take like a discounted retainer to get your scale, uh, and volume up and create this portfolio and try your shot to get your first preliminary sales. So you can get picked up by an outreach tool where they're filtering by sales and post. Got it. Right. Just to fill that data up. Um, and then another way is just DMing the products that are sort of like up and comers. Right. If I look for the top selling products and I'm a low selling creator, am I going to get accepted into that? You know, probably not. But if I went down to like the up and comer products or the newer products where I really resonate with them and I request a sample, they're going to be more likely to accept. And then the last way is like just buy the product you want to promote or go to creator events. Like, I don't know if you went to the goalie or not the goalie. Sorry, there's TikTok Shop Health Summit. Right. And every creator was just going through and I talked to one of them, they were getting samples from each booth and they were just like, oh, like all these top selling brands would never approve me for sample requests. So I just have like a hundred products here. I'm actually going to go and create content on. Interesting.

Speaker B: Okay.

Speaker C: There's a lot of ways to get, uh, involved there.

Speaker B: All right, so uh, for this last part, I just want you to walk me through like what your app actually covers and what it helps you handle.

Speaker C: Yeah, yeah. So Basically we're a TikTok shop partner. We're an end to end creator matchmaking system. Right. We'll help you connect to over 3.3 million creators in TikTok Shop's database. And then we'll help you automate every step of the way from outreaching to the creator, responding to the creator, sending a personalized creative brief, reminding creators. And then once they actually post a video or engage with your brand, we can set up all kinds of community activations. Right. We can collect their Spark codes and get ads authorization, get usage rights for their content, and then get their phone numbers and emails if you want to run like SMS campaigns, text message or email campaigns and other things like that. Right. And then really we help integrate with Discord. We have Discord APIs. So if you want to send push announcements to Discord or automate creative briefs to go in there, sort of like a newsletter will help there too. Um, and where we're looking at heading towards is really around more agentic workflows where we'll analyze what's working in the industry and what's working with your content. And we'll have things like creative agents that help summarize the top 10% of hooks and selling points that are working and draft new creative briefs and take inspiration from what's working in the ecosystem. So you can focus on measuring the feedback loops between your ads manager and GMV Max. Right. And then the top 10% of your creators on a rolling basis.

Speaker B: Okay, well, cool. So uh, thank you so much for coming on the show. If people want to check out the app or get a hold of you if they have any questions, where can they reach you?

Speaker C: Yeah, you can find, uh, me on LinkedIn, um, fairly active on there. Try to post every day and then we also have a link on our website that says book a call that'll feed right to me or our co founder Bora's calendar and you can get a hold of us fairly easily.

Speaker B: Sounds good. Well, thanks again for coming on the show. Appreciate your time.

Speaker C: Thank you.

Speaker A: Hope you enjoyed this episode. If you're looking to learn more about how to sell ah on TikTok shop, make sure you follow Sohan on LinkedIn. For more information and resources, go over to mywifequitterjob.com episode 644. And once again, if you're interested in starting your own e commerce store, head on over to mywifequitterjob.com and sign up for my free 6 day mini course. Just type in your email and I'll

Speaker B: send you the course right away. Thanks for listening.