With fees slashed and products going viral, TikTok Shop is now a serious alternative to Amazon Marketplace.
Amazon has dominated online shopping for decades, but a new challenger is gaining momentum among sellers tired of complex fees and intense competition. TikTok Shop, the social media giant’s e-commerce feature, is drawing merchants with the promise of lower costs and access to viral marketing opportunities that can turn unknown products into overnight sensations.
Since launching in the U.S. in September 2023, TikTok Shop has reached 398,000 stores and generated $9 billion in sales, according to industry data. The platform has become particularly attractive to sellers targeting younger consumers, with 36% of Gen Z users shopping on TikTok Shop monthly.
The appeal is clear: while Amazon charges referral fees ranging from 8% to 15% for most categories, TikTok Shop currently charges a flat 6% commission on most sales. But the real draw may be TikTok’s unique ability to turn products viral through short videos and influencer endorsements, creating sales spikes that traditional e-commerce platforms struggle to match.
The Fee Factor: Why Sellers Are Shopping Around
The difference in costs between the two platforms has become a major factor in sellers’ decision-making. Amazon’s fee structure has grown increasingly complex over the years, with sellers paying multiple charges:
• Referral fees: 8% to 15% depending on product category
• Fulfillment fees: $2.50 to $6+ per item for FBA services
• Storage fees: $0.78 per cubic foot monthly (standard season)
• Additional charges: Returns processing, inventory placement, and seasonal peak fees
“When you add up all of Amazon’s fees, referral, fulfillment, storage – you’re looking at 20% to 30% of your revenue going to fees,” said Maria Rodriguez, who runs a small jewelry business and recently started selling on TikTok Shop. “TikTok’s 6% feels like a breath of fresh air.”
Amazon announced in December 2024 that it would freeze fees for 2025, acknowledging seller concerns about the complexity of recent changes. The company said it wants to focus on “simplicity and stability” after introducing multiple new fee types in 2024 that required sellers to modify their operations.
TikTok Shop’s fee structure remains much simpler:
- Commission fee – 6% on most products (5% for jewelry)
- Transaction fee – $0.05 per withdrawal
- Optional services – Fulfillment and advertising (seller’s choice)
The overall structure is far less complex than Amazon’s multi-layered approach, making it easier for sellers to calculate their true costs and profit margins.
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Start Selling for FreeThe Power of Going Viral
Beyond lower fees, TikTok Shop offers something Amazon cannot easily replicate: the potential for instant viral success. Products featured in popular TikTok videos can see explosive sales growth that would take months or years to achieve through traditional e-commerce channels.
According to research, 78% of TikTok shoppers discover products through influencers, creating a direct pipeline from content creation to purchase. This differs dramatically from Amazon’s search-driven model, where customers typically arrive knowing what they want to buy.
“The discovery model is completely different,” explains David Chen, an e-commerce consultant who advises sellers on platform strategy. “On Amazon, you’re fighting for visibility in search results. On TikTok, a single video with the right hook can put your product in front of millions of engaged viewers.”
This viral potential has attracted both established brands and new sellers. TikTok Shop has over 500,000 U.S. sellers as of 2024, many drawn by stories of small businesses achieving significant sales through creative video content and influencer partnerships.
The platform’s algorithm helps products gain visibility based on engagement rather than paid advertising, though TikTok does offer promotional tools for sellers who want to boost their reach. This organic discovery model has proven particularly effective for lifestyle products, beauty items, and trendy accessories that photograph well and appeal to TikTok’s younger demographic.
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Get My ValuationChallenges and Growing Pains
However, TikTok Shop’s rapid growth has come with significant challenges that highlight the platform’s relative immaturity compared to Amazon’s established infrastructure.
During the 2024 holiday season, TikTok Shop conducted a major crackdown on non-compliant sellers, with reports suggesting up to 80% of some seller groups faced store closures. The platform has strict requirements for new sellers:
• Sales targets – Achieve 500 orders within first 30 days
• Quality standards – Maintain negative feedback rates below 0.4%
• Compliance rules – Strict enforcement of community guidelines and product policies
These sudden policy changes have created uncertainty among sellers who worry about the stability of their TikTok Shop businesses. Unlike Amazon, which has developed more predictable, if complex, policies over two decades, TikTok Shop’s rules continue to evolve rapidly as the platform scales.
“The potential is huge, but the platform still feels unpredictable,” said James Thompson, who moved part of his electronics business from Amazon to TikTok Shop. “Amazon has its problems, but at least you know what to expect. TikTok Shop can change the rules overnight.”
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Discover MilesThe Looming Regulatory Question
Perhaps the biggest uncertainty facing TikTok Shop is regulatory. The platform operates under the constant threat of a potential U.S. ban or forced sale, which has created anxiety among sellers who have invested in building their TikTok Shop presence.
This regulatory uncertainty has led some sellers to maintain a presence on both platforms rather than fully committing to TikTok Shop. The threat of sudden policy changes, whether from TikTok itself or U.S. regulators, makes it risky for businesses to rely entirely on the platform.
Despite these concerns, many sellers view TikTok Shop as worth the risk, especially given the platform amassing $9 billion in U.S. sales for 2024, according to Momentum Works, a Singapore-based consultancy.
Social Commerce Reshapes the Landscape
TikTok Shop’s growth reflects a broader shift toward social commerce, where shopping and social media converge. Global social commerce sales reached nearly $700 billion in 2024, up 23% from the previous year, with platforms like Instagram, Facebook, and TikTok leading the charge.
This trend is particularly pronounced among younger consumers who are comfortable making purchases within social media apps rather than switching to dedicated e-commerce sites. Nearly half (49.7%) of social shoppers on TikTok buy something from the platform at least once per month, higher than the frequency seen on Facebook, Instagram, or Pinterest.
The success of social commerce is changing how brands think about online selling. Rather than focusing solely on search optimization and traditional advertising, companies are investing in content creation, influencer partnerships, and community building to drive sales.
Amazon Responds to the Challenge
Amazon isn’t ignoring the social commerce trend. The company has experimented with various social features over the years, including live streaming, influencer programs, and video content. However, these efforts have had limited success compared to TikTok’s integrated approach.
Amazon’s strength remains its vast selection, reliable fulfillment, and trusted customer experience. The platform processed hundreds of billions in sales in 2024, dwarfing TikTok Shop’s numbers. For many sellers, especially those with established businesses or complex logistics needs, Amazon’s infrastructure and reach remain unmatched.
The company has also responded to fee concerns by freezing increases for 2025 and offering enhanced incentives for new products and sellers. These moves acknowledge the competitive pressure Amazon faces from platforms like TikTok Shop that offer simpler, lower-cost alternatives.
Strategic Considerations for Sellers
For sellers weighing their options, the choice between platforms increasingly depends on their specific business model and target audience.
TikTok Shop works best for:
- Businesses that can create engaging video content
- Products that benefit from visual demonstration (beauty, lifestyle items)
- Brands targeting Gen Z and millennial consumers
- Companies willing to work with influencers and respond quickly to trends
Amazon remains better for:
- Complex product lines with detailed specifications
- Businesses targeting older or more diverse demographics
- Sellers needing sophisticated logistics and fulfillment support
- Companies wanting predictable, search-driven sales
Many successful sellers are adopting a multi-platform approach, using TikTok Shop to launch new products and build brand awareness while maintaining their Amazon presence for steady sales and broader market reach.
Final Thoughts
TikTok Shop’s rapid growth represents more than just another sales channel, it signals a fundamental shift in how online commerce operates. The platform’s combination of entertainment, social interaction, and instant purchasing creates a shopping experience that feels native to how younger consumers already use the internet.
While TikTok Shop may not replace Amazon entirely, it has proven that there’s room for different approaches to e-commerce. The platform’s success with lower fees and viral marketing has already prompted other players, including Amazon, to reconsider their strategies.
For sellers, the emergence of TikTok Shop provides both opportunity and complexity. Those who can navigate its unique culture and requirements may find significant rewards, but the platform’s youth and regulatory uncertainties mean it’s not yet a complete replacement for established channels.
