Jack (00:01.187)
Hey everyone, welcome to another live 4Play fireside. I'm here with Tim Chanotte. We're going to talk about how everything social commerce and how it's rewriting the rules of retail. To give you a little background on Tim, he's worked with over 400 brands from Duolingo to Gymshark and even Shopify. And his own account on TikTok has over 3 million followers. So if there's anyone that really knows their stuff when it comes to growing on social, it's Tim. So let's get into it. Take it away, Tim.
Timoté Chanut (00:31.054)
Thanks man, I appreciate the intro. I'm going to show my screen. I have a short presentation I was fortunate to give to Santander in London just about last week. And it'll take me probably about 20 minutes to go through this. I'd love to then do some Q &A and answer specific questions so that we make this as relevant as possible for everybody in the audience. Sounds fair enough?
Jack (00:58.349)
That sounds good, man.
Timoté Chanut (01:00.27)
Okay, let me see if I can just see the chat simultaneously. All right, perfect.
Timoté Chanut (01:09.73)
This is my first time on Riverside, but it seems to be working pretty well. All right, let's get started. So here is a question. Would you trust a teenager in that bedroom over a multimillion dollar agency?
Timoté Chanut (01:28.78)
because your customers already do.
Now, as someone who's been at the forefront of social selling, both as a content creator and working with a of brands, I've seen how social selling is rewriting the rules of retail so fast that brands ignoring it will be sailing into oblivion.
Timoté Chanut (01:57.698)
I've done this on a content creator perspective, having grown over 3 million followers and making thousands of videos on TikTok. But I'm also the owner of Young With Solutions, as Jack mentioned, with the team behind Gymshark, some companies you might recognize like Olaplex, Converse, Amazon, Duolingo, Shopify, and many more who we have helped to get on TikTok and transition towards this social selling shift.
Now, Evil Goods, I'm going to name a few examples of companies doing really well here. Evil Goods is a company that was started just a year ago and they are currently outpacing industry giants like Johnson & Johnson in online skincare. And they, all they do is social commerce on TikTok shop. In Q4, they made $28 million with social commerce. Roos Research.
is a company that was bootstrapped by some scrappy 27 year old entrepreneur just about a year ago as well and they're now making 15 million dollars per month. Bootstrapped.
Gymshark, one of the companies we've had the great privilege to work with, has been nominated as the fastest growing company in the UK based on the creator led campaign and social commerce.
So all of this is not luck, it's not hype. This is the biggest retail shift since e-commerce itself.
Timoté Chanut (03:36.654)
Now the question is, why is this happening now and how can we capitalize on it? So in this presentation, I'm going to attempt to touch on three key points and then we'll do Q &A. The first one is an overview of how retail is evolving. Then we'll look at the economics that is driving this change and why social selling is so appealing for both existing players in the market as well as new entrants.
And the last element is the playbook that we've seen do wonders for econ brands to start social selling with.
Timoté Chanut (04:18.798)
I'm not able to see everybody here, but my question to the audience in London was if you have a, you know, by race of hand, who doesn't know what social selling is? And it was basically just a quick walkthrough of the feature of tagging a product and for users to be able to go from watching a video to directly being able to purchase on the app. Okay. So I see a comment that we don't know this term social selling is like I said, the ability for users to watch a video.
and directly purchase from the app without ever leaving TikTok. So if you see my mouse, on TikTok Shop, there's a little button here where the creator would talk about the product. They click on it, they can add to cart and place the order. And this is creating a massive shift in how consumers are interacting with social media and getting products to them.
So let's start by understanding how products have traditionally reached consumers because for decades, the path looked like this. We had a brand going to retailer, which then led to the consumer. And this model created massive gatekeepers who ultimately controlled which brand succeeded and which one failed. The barrier to entry is enormous. You need capital to produce inventory connections with
buyers, you often have to sacrifice 40 to 60 % of your margins to these retailers and getting on the shelf might take you 12 to 18 months.
Timoté Chanut (05:57.838)
With the rise of e-commerce, particularly Amazon, it seemed to have democratized this process. But ultimately, what happened is that Amazon became the new gatekeeper. Today, you still need a ton of inventory. You need the right connections to have favorable deals and to rank on the platform. And as one of the entrepreneurs that we've interviewed on our podcast said, what used to get him when he used to spend $5,000 in 2014, he would get 25K back.
Today, you're lucky if you get $7,500 back from the same investment. So the platform is more saturated, it's more competitive, and Amazon has ultimately became the new gatekeeper. So now let's look at what is happening with social selling. The path has fundamentally changed and now look like this. We have brands that reach out to creators that each then have their direct path to
the end consumer. And this model has a few revolutionary characteristic because brands now work with dozens, if not hundreds of content creators directly who each have their own path to the consumer, like I said, and it's the algorithm who decides what succeeds based on the engagement, not boardroom decisions like you would with traditional retail. And like mentioned, the sales
happen directly from the content with one click. So if we look at Roos research, traditionally they would have had to spend month and month and month in developing samples, reaching out to different retailers, so on and so forth. But instead, what they did is just identified a trendy category, which we'll come back to in greater depth later. In this case, it was longevity supplement.
They developed an ideal product for social selling, which again, we'll come back to. And from then, they reached out to hundreds of health related content creators, sent them samples, as well as a 25 % commission on any sale that they make selling this product. These content creators are now incentivized to make videos about Roos Research and they make money by doing so.
Timoté Chanut (08:20.214)
Effectively, what this has done for research is built them a massive content creator army. And the results is that again, it's $50 million this month with margins that would be impossible with traditional retail.
Timoté Chanut (08:42.382)
So this evolution disrupts traditional retail gatekeepers in three fundamental ways. There's the speed to market. So in the old model, it might take you 18 to 24 months to build a meaningful distribution channel. Today, however, a brand can go from a concept to millions in revenue in under 90 days. Capital efficiency.
So traditional retail required a massive upfront investment in inventory and trade marketing. Today's models, today's model allows for brands to start lean and scale with revenue. And the third most important and my favorite point by far is merit-based visibility. So traditionally shelf space went to the brand who, to the brands who had the deepest pocket.
However, in the creator economy, visibility goes to the products that genuinely resonates with consumers.
Timoté Chanut (09:49.326)
All right, now let's look at the economics driving this change. So we're going to follow the money from a brand that we work with. What we did with them is run a case study on how the unit economics differs from platform to platform. So they are selling this self-tanning lotion and they sell it through Amazon, through Meta, TikTok and Tesco.
RK's study tracked how the money flew. So from traditional retail, is Tesco, Amazon and Meta, which we'll call traditional digital, and then social commerce. The retail price remained consistent across all of these distribution channels. However, the platform cut was significant with traditional retail, 50%. Amazon takes 50 % processing fees and social commerce, TikTok shop specifically, takes 8%.
Marketing costs are negligible with traditional retail as this is effectively the fee you're paying for. On Meta, they spend $10 per acquisition, which is effectively a third of the average order value, which is pretty good by e-commerce standards. And with social commerce, their marketing cost is giving 20 % to the creator as a commission for the sale.
Cost of goods remain the same. Fulfillment costs are a little bit higher when you do e-commerce. But at the end of the day, when you look at the gross profit or profit margin,
Social commerce has twice more margin than traditional retail and 50 % more than traditional digital. So this table only shows you half of the picture because we also need to consider upfront investments associated with getting launched. With traditional retail, it requires a huge investment for inventory, your time to
Timoté Chanut (11:53.166)
getting your first sale might be 12 to 18 month and breaking even you're 18 to 24 month. Traditional digital, so Amazon and Meta, you need to front the ads, which is expensive. $15,000 is actually quite conservative. Your time to the first sale is quite quick, so seven to 30 days and you break even two to six month down the line.
With social commerce, however, your initial investment is negligible because you're not paying for any of the marketing upfront. You only pay once your creators have generated you sales. So your time to your far sale can be almost immediate because the creators can start making content tomorrow and you break even pretty much from day one.
Timoté Chanut (12:34.518)
I'm flying through this by the way, if you want to stop me Jack to elaborate on anything in specific, let me know.
Jack (12:41.027)
Sure, I've got an interesting thought, I guess, on the two slides back. I think one of the interesting things about paying commission to creators as well is that the volume is the variable, right? If they sell more, they make more commission, but your efficiency isn't variable, right? We've got here an average of $10 on meta, but what happens if there's an outage? What happens if there's a change, right? Your efficiency could swing drastically. And if you have, I don't know, a budget of 10, 15, 20, 100K a day.
Timoté Chanut (13:02.126)
Mm-hmm.
Jack (13:10.787)
You can burn a lot of money very quickly. You don't do that when you have commission. Your efficiency is stable. It's just the volume that's the variable.
Timoté Chanut (13:19.83)
Exactly, Yeah, in one case you have to front the investments and the other one you pay after the money is already in your bank account.
Jack (13:29.059)
Right.
Timoté Chanut (13:31.298)
which is actually one of the main things I wanted to touch on here. Like why does this matter? for econ leaders in the US, the UK, this economic shift creates three critical advantages and capital efficiency is exactly what we were discussing. Now you can basically launch with a 70 to 80 % less upfront investments, allowing you to test more products and different markets simultaneously. This is also true paper performance. So you only pay for marketing that actually drives sales.
which drastically reduces your risk. And the last element is speed to market. So you can validate products in weeks rather than month and reach profitability in a fraction of the time. The brands that understand and embrace these economics are the ones winning in today's market. It's no longer about how much money you have and how deep your pockets are. It's about how efficiently you are able to deploy that capital.
Timoté Chanut (14:34.05)
Let's go through the social commerce playbook. So now that we understand the economics driving this shift, let's examine how do we go about this effectively. So I want to talk about content strategy, which is the most important part. Then we'll look at the implementation framework and operation readiness. So the content strategy.
is so let's look at the architecture that drive sells. Content that works on TikTok is unpolished. You don't want to do a Hollywood production. You want to remain raw and authentic. This is just what works. And I'll show you an example in a minute. You want to have a pattern interruption and lead with moments, not pitches. Don't talk about your product, rather talk about an emotion that you're that you might be going through using the product.
You want to spark curiosity, so give a reason for people to keep watching until the end of the video. And you want your video to feel like a personal recommendation, not an ad.
Timoté Chanut (15:44.728)
So I'll play a video example here. hope this sound will come through, but let me actually first break down some of the stats behind this video. So this is a TikTok video from an affiliate creator who was not paid to make the video. They just aren't a commission out of the money that she generates. And her video got 5 million views. It was posted in mid February. Got 5 million views.
She sold 2000 units, generated $50,000 in sales, and most importantly, zero ad spend on all of this. So it didn't cost the brand anything to make this 50K in revenue. It's all organic. Now let's look at the video and we can break it down together. Keep in mind the points I just mentioned. So, know, raw, authentic, personal touch, or personal, feels like a personal recommendation and such.
Jack, will you let me know if the sound is coming through?
Jack (16:44.235)
Sure, We don't have audio unfortunately. No, it's not coming through.
Timoté Chanut (16:46.882)
Is it?
Timoté Chanut (16:52.238)
Do know how to do that on?
Jack (16:55.713)
Are you tab sharing? I think that, let's try pressing play again and see what happens.
Timoté Chanut (17:11.182)
You have to shove a tab in order for...
Jack (17:14.113)
Yeah doesn't look like the audio is coming through, but maybe I'll drop a link in the chat if anyone wants to watch it.
Timoté Chanut (17:23.254)
Not the whole screen. I'm not sharing the whole screen. I'm just sharing a tab. Here, let me just stop sharing for a second.
I know that on zoom also show the tab audio. there we go.
Jack (17:37.089)
Lisa's coming in clutch, she said headphones is a problem. Also could be. Thank you Lisa.
Timoté Chanut (17:40.972)
Okay. Okay. Just let me know now. Maybe it works.
We good?
Jack (17:48.035)
Yeah, we got it.
Timoté Chanut (17:49.281)
Alright, let's go.
Timoté Chanut (17:58.286)
So that's your hook. There's no mention of a product here. Pattern interruption is the hook here.
Timoté Chanut (18:16.8)
I notice how the production quality here is her filming her MacBook in her bedroom. It's not, it's no fancy camera, no fancy lighting. It's just a YouTube video that she's playing, right?
Jack (18:22.499)
That's it.
Right.
Timoté Chanut (18:40.11)
So now she's parking curiosity, right? Like, what's the secret?
Timoté Chanut (19:27.288)
So here she's doing some evidence and social proof on the beef fat. And notice that we're a minute in the video, there's still zero mention of any product. You think you're just watching like an educational piece of content here.
Timoté Chanut (20:03.702)
And there we go, one 30 second in the video, one minute and 30 seconds in the video. And finally we have the product reveal. And again, like this feels like a personal recommendation. She's not like trying to sell you hard on it. she is, but her angle is really smart.
Jack (20:18.403)
Alright.
Timoté Chanut (20:48.62)
All right, and that's your master class.
Jack (20:52.227)
I mean, man, she's a great marketer, hey?
Timoté Chanut (20:55.926)
Yeah, very different than your traditional meta header, right? Here, me show the right tab again.
Jack (20:59.339)
Yeah.
Timoté Chanut (21:04.96)
Okay, are we back on the presentation?
Jack (21:07.415)
Yeah, we're back.
Timoté Chanut (21:09.102)
Okay. So yeah, 5 million views, $50,000 in sales, all organic. So the margins, you know, are, are insane.
Timoté Chanut (21:22.934)
Okay, so now that we've seen kind of like the gold standard for what TikTok videos look like, let's look at how do we actually go about doing this because it's quite different than what traditional digital marketing usually looks like. First is important to understand that every product is not made equal to succeed on
on social selling, it's a platform where you're going to have to give a significant portion of your sales to the creator. And you want to make it as lucrative as possible for them. It's generally between 20 to 30 % commission, which in reality is what you would spend regardless on paid media. But so it's really important that you have a product that has inherently high margins. We recommend like 70 plus percent.
You want to have visual appeal, so a product that has a wow factor just visually, because this is going to be sold through videos. yeah, visual appeal is important. Emotional resonance, I think that's pretty self-explanatory. Storytelling potential, just like the video that we saw together. And repeat purchase.
Best businesses right now are the, best businesses on TikTok shop are the ones who have MRR into play because they can, you know, give more margins to the creators upfront. Creators make more money so they talk more about them and the brands are happy because they know they'll make their money. They, you know, that end of the profits will come through the second purchase, third, fourth, et cetera.
Timoté Chanut (23:07.266)
Now, creator strategy, which is like by far the most important part. When you think through creators, you want to do volume over precision. And so what I mean by that is actually, have we heard the term, the TikTokification of social media before?
Jack (23:28.576)
I haven't heard it.
Timoté Chanut (23:30.208)
So the TikTokification of social media is how effectively now our social media platforms are based on interest, no longer who you're following. So if you open Instagram today, if you open TikTok or YouTube, you won't arrive. The homepage is no longer who you follow, it's just based on your scrolling patterns and the algorithm gets to understand what you're interested in because it keeps you hooked to the platform, right? And what this has done is that effective...
Effectively, it no longer matters how many followers you have. If you want to get in front of your audience, it's just a matter of making content that resonates with that particular customer. Meaning that big influencers don't hold nearly as much power as 10 smaller ones that can make hyper-personalized messages to the right audience. And this is not to my advantage because I'm an influencer myself, but
you will see better results with a hundred smaller influencers that might have all 5,000 followers, 5,000 followers each, rather than one big one that might have 3 million followers. Does that make sense?
Jack (24:43.383)
Yeah, for sure.
Timoté Chanut (24:44.812)
So you want to partner with many content creators, not just one perfect one.
Performance-based compensation, so you want to give them 10 to 25 % of sales. And that is generally on top of an incentive roadmap structure. Have you guys seen the goalie nutrition incentive roadmap? I think that it's fascinating. I wasn't planning on doing this, but I will share my screen again here because the game is, the name of the game is how, basically how much money can you make?
how much money can creators make talking about you. And the more the merrier. What Goalie Nutrition has done...
Timoté Chanut (25:36.232)
is this.
Timoté Chanut (25:42.03)
Let me pull up the full image.
Timoté Chanut (25:49.102)
So Goalie, it's a supplement. They give to their creators 25 % commission on all sales. But on top of that, to keep the creators hooked and think of it as the carrot and the stick, right? They want people to keep on talking. But every time you talk about that, you accumulate sales towards cash prizes or certain prizes. So if a creator generates $1,500 in GMV, which is a synonym for revenue,
they get an iPad. If they generate $4,000 in GMV, they get an iPhone. 15k, they get a trip to the Bahamas. And the list keeps going until 1.2 million, where they literally get a condo in Miami. And so what I love about this is that, you know, the more more creator talks about Goalie, the more they're going to make. It's not just about the percentage anymore. like they're actually walking towards a condo in Miami.
Jack (26:33.057)
Nice.
Timoté Chanut (26:47.252)
And actually, Gauley Nutrition is the biggest shop on TikTok right now. I think it's something like $34 million a month. Now, I'm not saying also that you should be doing this because you probably are not gonna have the same margins as Gauley. But it's the fundamental, it's the principle that I'm trying to walk through is you wanna make it as lucrative as possible for your creators to keep talking about you and not chat.
Timoté Chanut (27:21.858)
Performance-based compensation, like I said. And last but not least, you want to enable, not control. So when you work with these creators, you want to give creative guidance and briefings, but allow your creators to put their own twist and make content that feels true to them and that will resonate with whoever they talk to. The video that I just showed you, I can guarantee you the Brandon and Askar to pull up that YouTube video and do that. That's just like...
what she came up with and, and, and, know, like that creativity led to the 50 K in sales organically.
Jack (28:00.151)
Yeah, I can agree more. I think that a lot of these creators, yourself included, you've proven that you know how to make that content. So why would we put boundaries and try and control the content when there's a proven recipe there, there's something that works. We can let that work for us too.
Timoté Chanut (28:18.626)
Yeah. And it's great to show best practices, videos that have gone viral in the past because it can help them get a feel as to what type of angles resonate. But yeah, you enable them, you don't control.
Timoté Chanut (28:35.832)
Cool, let's talk about operational readiness. So because you're gonna be dealing with hundreds of creators, first off, the advantage of TikTok Shop and social commerce is that it comes with built-in tools that help you make this a reality. One really cool thing is automatic attribution. Because the users never leave the app, you have a one-to-one attribution.
Most of you, as I understand this is an e-comm audience, will have attribution problems on Meta and more because they're taken to a separate site. On TikTok sharp, it's one-to-one. So you know exactly what drives sales, which video, how much, when in the video, et cetera, et cetera. Also, the commission management is done automatically. So paying out these creators is done by TikTok. You don't have to worry about it.
Performance analysis, because you have all of the data, you can easily see exactly what triggered the sale, what portion of the video, et cetera, et And actually, you can also see that data for all of your other competitors. So if you want to see what creatives led to sales for your competitors, TikTok Shop gives you that natively.
Seamless checkout, like I said, people will be able to purchase directly on the app. And we actually have found that the bounce rate, the average bounce rate across the funnel is 50 % less than on a Shopify website, just because they don't have to load new pages and such. Because it's in app, it's instant pages, it loads automatically. The bounce off rate is 50 % less.
So you're effectively getting twice more conversions.
Timoté Chanut (30:33.548)
Now let's look at operational requirements. This is a labor intensive venture because you're obviously dealing with hundreds of creators, which can seem overwhelming, but really all you need to get good at is creating onboarding creators, sending samples, teaching them the basics of the benefits of your product and such, and having a support team so that these creators
you know, have their questions answered whenever needed. What we have found best is to just create like a Discord or Slack or WhatsApp community, put all of your affiliates in there, and then you have one or two moderators that are constantly, you know, incentivizing your creators to make videos, answering their questions, et cetera, et cetera.
Inventory agility, so one of the important piece of social commerce is that you'll see huge spikes of demand whenever something goes viral. You need to be able to fulfill on that demand. And so a lot of brands go out of stock. So it is precautious to be ready to, you know, manage viral demand and being able to reorder more products and just fill up your inventory.
have a buffer stock prepared and such and also have contingency plans if you do get out of stock.
Content amplification, so whenever something goes viral organically, you can really amplify the return on investment by running ads on top of these videos. So Spark Ads is tremendous. Spark Ads is basically the video that I showed you earlier. The brand is able to request usage rights on that video and run some ads on top of it. This is great, makes a lot of money. We often see double digit ROAS through
Timoté Chanut (32:33.464)
Just that.
And the final component is cross channel integration. So what we end up seeing is that while people discover us on TikTok, there is about 30 % of the total traffic that will end up purchasing on Amazon or retail because they might trust these platforms more. And so you don't want to neglect the
your Amazon presence nor what it could create for retail. It's very much like a blended approach. yeah, by capitalizing on social commerce, you're effectively lifting up all of your other marketing ventures.
Timoté Chanut (33:20.952)
Cool, so takeaways just to end on. The economics of social selling is creating an unprecedented opportunity for brands to enter the US and Canadian market. Matter of fact, TikTok Shop just launched in France, Italy, Spain, and Germany recently. So Europe is coming into play. Because actually, TikTok Shop US has been there for just about two years.
In Europe, was in February that it all launched. So I think there's a big opportunity in just taking what's working in the US, bringing that to Europe. As a European myself, I can tell you that a lot of our successful businesses in Europe now are just copycats of what Americans figured out. So, yeah, I might be doing that myself, frankly, but I think there's something there for sure. Just because like the Europeans haven't, you know, they're starting from zero in terms of
knowledge base and trial and error about TikTok shop. Like they haven't done it nearly as long as the Americans.
However, this window of opportunity won't last forever. And so the time to act is now while the conditions are still favorable. This is a blue ocean. Last but not least, success requires a fundamental shift in how we approach product selection, creator relationships, and ops.
Timoté Chanut (34:55.008)
Whoops, supposed to be some text here saying, we're ready for you. And yeah, we can hop into Q &A. Et voila.
Jack (35:04.055)
Awesome, well I liked the rubber duck. I had a really interesting question from Ivan here. Let's take a look.
Jack (35:15.395)
There's a lot of messages here.
Let's see. So he said, so because this is a big volume of creators, you choose the best performing, but how to find creators that can resonate with the product, speaking as an agency.
Timoté Chanut (35:32.408)
So you can see who they have spoken with in the past, sorry, content, sold products of in the past. Like you can see a library of who they promoted. And if you find that, you know, this guy does particularly well with health supplements, then that's a great lead indicator.
Jack (35:57.611)
Awesome. And we've got another one from Mina here. Do companies need to pay any upfront investment fee to start collabing with TikTok creators in the way you described earlier? So we're talking about commission a little bit earlier, but are there some creators, especially specifically on TikTok that require an upfront investment, right? They have a fixed fee for their time.
Timoté Chanut (36:20.974)
At times, yes, but that is generally secondary. Another way to avoid a creator that's making you a lot of money, instead of letting them chat and talk about a competitor, some brands give them a retainer. So they'll give them a $1,500 a month so that they don't speak about competitors and only talk about them. But upfront, you don't generally need it, except if you do live streams. TikTok live streams are...
are great, you end up paying a rate per hour which ranges between 20 to 50 dollars on top of the commission.
Jack (37:00.311)
Yeah. These questions are all over the place. I'm not sure if you can see them in the chat, but I've got another one from Eric here that says, someone helped me understand why this is not a copyright violation using Selma's image to sell a product.
Timoté Chanut (37:13.57)
Yeah. So this is not the brand doing these videos. These are individuals. So there's a question of whether or not there are copyright issues, but the brand is not saying, if there was a responsibility would not fall under the brand. would fall under the individual because it's posted on their account. The brand has like nothing to do with it.
Jack (37:38.167)
You mentioned earlier, I'm not sure if this was a question from somebody in the chat, but you mentioned earlier that this is very labor intensive. There's a couple of questions, people asking how to get started, how do I reach out to these influencers? Just how labor intensive is it? What does that process look like?
Timoté Chanut (37:55.724)
Yeah, so you want to have people that set up your shop. You want to have people that reach out to creators, send them samples, and you want to have them moderators, media buyers, and generally you have like a creative director that oversees the entire section. This is something that we offer as an agency if anyone is interested, but most importantly actually when it comes to finding creators,
where I think this can be really valuable for the people watching here is that I have a community of thousands of existing talents who are eager, who have proven to make money and are eager for opportunities. So if you guys would like to be connected with that talent pool, it's 5,000 people, mostly in the U S that again, are trained about making great content. They have historically sold a lot on TikTok shop and, and yeah, they, they, they want to, they want to walk that hungry. So if you guys are keen for that, um,
I don't know how we do this, I can drop an email and we can take it from there.
Jack (38:57.411)
Yeah, I think that'd be perfect. Yeah, let's drop your email in the chat. I've got your email so I can drop it in there in a second. We've got another question here on luxury goods. What if you have a very expensive product and it's going to cost you quite a lot to start sending that to creators? You're working with lots of creators. You don't want to send this very expensive product. I don't know. What would be a luxury gift that would be expensive to add? Coal plunges, engagement rings, right? You can't just send those around willing.
Timoté Chanut (39:18.231)
Mm-hmm.
Timoté Chanut (39:23.754)
Engagement rings. I actually just finished a case study with... Today, matter of fact, completed a case study for 77 diamonds. It's engagement rings. They go for 4, 5K a pop. And we asked for the creator, we would send them an agreement that they would return the product once it's over. And we also asked them to process a deposit with us, like a security deposit.
So that's how we got around it. But it's a limiting belief that you can sell high ticket on TikTok. Matter of fact, there's this one creator that exclusively sells bucket bags on TikTok shop. Bucket bags, we rank from like 50 to 80 grand each. And she goes on live streams. She reviews it, she wears different outfits, et cetera, and she's balling.
Jack (40:19.093)
Nice, good on that.
Timoté Chanut (40:19.532)
And we did like similar strategy with engagement rings.
Jack (40:23.583)
Awesome. We've got a question here from Laura. What cut does TikTok take on their platform, on sales through their platform? I think it's 8%. It's 8%. Yep. Mina says that copyright loophole is wild. yeah, it's pretty wild. But I guess the brand is technically not infringing, right? It's creators that are creating the content, and that might not even be infringing, right? I think I saw something somewhere that you can use public personalities in.
content online. that might be the loophole here as well. All right, we've got one from Gerrick here. How does this how this model could work for drop shippers?
Timoté Chanut (41:05.324)
Well, frankly, TikTok shop is mostly made of dropshippers right now. It's like the new wave of Ecom.
because I mean...
Jack (41:13.666)
Yeah.
I can't see taking inventory as a requirement to participate in TikTok shops, right? Like whether the inventory touches your hands or goes directly to the customer, I don't think that that's a barrier to entry. mean, that's another example of not having a barrier to entry, right? You don't have to take an MOQ, you don't have to take inventory and manage it. So I think this model maps on for Dropship is perfectly correct.
Timoté Chanut (41:23.351)
Yeah, no.
Timoté Chanut (41:36.942)
Yeah, that's right.
Timoté Chanut (41:40.812)
Yeah. If you search TikTok shop on YouTube, like you'll see it's all dropshippers that are talking about it the most. Because, because again, like CPMs are, I mean, you're effectively getting your CPA is a fraction of what it would be on, on the traditional retail platforms. So, so yeah, all the dropshippers are, are rushing on this. I mean, are hopping on this gold rush.
Jack (41:47.635)
yeah.
Jack (42:07.979)
Right, I mean, there's a marginal requirement, right, to find that efficiency somewhere else. And if you can find that efficiency in acquisition costs, you can make the business work, right? We've got one from Sonia here. Also, what if you sell furniture, for example, how would you approach that? Do you send out products that have more chance of going viral, merchandising? What's your approach to merchandising, choosing the products?
Timoté Chanut (42:33.078)
Is that two questions?
Jack (42:34.785)
I guess it is. Do you send out products that have more of a chance of going viral and then furniture? Do you have any specific experience with furniture?
Timoté Chanut (42:45.006)
Myself, myself not, but there's this website called Calodata. We can even do this exercise together if you'd like. As you can literally see who is selling furnitures and how much money they're making.
Jack (43:02.915)
Or did you say that was called Hello Data?
Timoté Chanut (43:05.262)
Can you see my screen?
Timoté Chanut (43:12.63)
So this website, you can search for categories. So let's type for nature.
baby furniture and all furnitures. Let me do this differently.
Timoté Chanut (43:34.286)
Okay, and this basically has built-in APIs with TikTok Shop and you can see each category, so on and so forth. So we can see furniture as a category in the last 30 days generated $30 million in revenue. Now we can go more in depth. So $30 million revenue, there are 2,500 shops, live revenue is 8 million, video revenue is 15 million.
And then we can see the top shops or the top products per category. So here we have a sofa for $600. Average unit price is $600. They sold a million dollars this month. And we can even see the videos how they're selling it.
Can you hear it?
Jack (44:20.375)
That is incredible. Can't hear it right now, but if anyone's interested, KiloData, if you want to check it out. This is awesome. mean, this kind of comes back to what you were saying about, you know, AOV and premium products on TikTok shops being a limiting belief. Someone's doing it and they're doing it with, you know, in this niche of furniture, $30 million, right? I mean, that's not one individual, that's the whole market, but, you know, if somebody can do it, then why can't you? Right?
Timoté Chanut (44:38.776)
Yep. Yep.
Timoté Chanut (44:49.986)
Yeah. I mean, this individual shop is making a million dollars a month, so it's not bad.
Jack (44:56.419)
you
Jack (45:00.429)
And then the second question was, do you send out products to creators that have more chance of going viral? And I guess I have a follow-up question on that one, which would be, if you do, how are you deciding what to merchandise, what to choose to send out to creators?
Timoté Chanut (45:09.198)
Thank you.
Timoté Chanut (45:19.022)
Yeah, we, let's say you're a brand and you have 10 different skews. I would recommend that you let the creators pick that top two slash three. And the, the name of the game is volume. So you don't want to overthink exactly what is your likelihood of going viral and exactly which product combination. It's more so a spray and pray. So let's give out, you know, three skews to 300 creators. 10 of them will go viral and we'll make our money back that way.
Also, once you have some creators that start to go viral, then the next round of content will go more viral because you can basically tell all your affiliates, hey, this concept did really well, make a version of your own. Like this is why you did well. This is the angle that works. Now just go ahead and make a version of your own. And so your viral hit rate goes from like 5 % to 25%. So yeah, the goal is volume, not precision.
And I can actually, let me reshare my screen quickly here as the brand I was just showing you.
So this product, million dollar a month, you can see that there are, in the last 30 days, 280 creators have talked about this product. no, sorry. Yeah, that's the number of creators, but in total, almost 600 videos were made organically.
And on top of that, they went live about 10 times a day. I mean, 10 times per day, someone made a live talking about them. So just to give a sense of like the scale at which we want to do things here.
Jack (47:10.499)
crazy who.
There's some other things in terms of merchandising. I guess this kind of maps on to merchandising your products in other places. Some businesses are assortment driven, right? By providing a huge amount of supply to different market demands, they expose themselves to opportunity to go viral more, right? If you hedge all of your bets on one business and one product, you only got one shot, right? You're putting all your chips on black. But, you know, having a different assortment of products to provide supply to different market demands might be your strength, right?
Jack (47:47.893)
So we've got another question from Kyle here.
Jack (47:54.049)
you're using TikTok Creator Studio to find creators or something else. I guess this is tooling. How do we actually source TikTok creators?
Timoté Chanut (48:05.624)
So if the question is asked to me personally, like I said, I have like an existing pool because we have an info product teaching people how to make content creation. We have about 5,000 students and that's like an asset that's quite valuable because we can deploy an army like on the go really. But there are various ways to go about it. So if you're starting from scratch, one of the ways is
is going on an account like, okay, hey, I like, this is one of my competitors. Let's see who's talking about them because you can literally be the exact creator. So I can see that Taylor in the last 30 days sold 100k worth of this product, which is about 200 items. And it was done through revenue, not live stream. Some people sell through live streams like, okay, let's go see Taylor. I can access his account and I remember, so it's a hard.
The TikTok account is here and her email is here. So let me copy that. Let's go to Gmail and say, hey, I know that you've been talking about this other brand. They're probably giving you 20%. How about I give you 25 % and you talk about me? Simple as that.
Jack (49:21.953)
I like that. It's fun. Eric.
Timoté Chanut (49:25.378)
And you can again see, like from here, can see which brands she talked about, how much revenue she's generated, and you can go super granular on each of these things.
Jack (49:38.125)
This is not so much of a question, but Mina is saying, I'm surprised at how late the product intro comes in in those TikTok ads, the content. The example you showed on Selma, it came in around the one minute 30 mark, but there is a sweet spot from, is there a sweet spot from your experience? That is a question. Is there a sweet spot when the product comes into the video?
Timoté Chanut (49:39.16)
But...
Timoté Chanut (50:04.814)
I've actually learned that everything that I thought to be true, I mean, as a content creator myself, I grew my account by having videos that are like 32 seconds long. Like that was my sweet spot. I knew that was the formula that made TikTok work. And the recent years, it's really like...
I think there's not like a one size fits all sort of strategy and you know this creator was able to make a really entertaining story around it all and so for her it made sense to to make a two minute long video. Do I think that generally speaking a two minute video retains the audience for that long? No, people have pretty short attention span but it depends on on your story.
Yeah, I don't think there's sweet spots anymore. You just want to let creators come up with their own angles. And over time, you do tend to see for your brand or for your products, what angles work best. And then it's a matter of rinse and repeat.
Jack (51:21.411)
All right, we don't have any other questions here. Let's leave your email in the chat in case anyone wants to reach out. If anyone has any more questions that you want to slip in, now is the time. We're about to run out of time with Tim here. Let's see.
Jack (51:41.645)
Here is his email. If you want to reach out to the team at YoungWords Solutions, you've got a direct line.
Timoté Chanut (51:51.138)
Jack.
Jack (51:57.987)
All right, Mina has said, thank you so much. Garik has said, great background, appreciate it. Calla data is my jam from Kyle. Thank you so much, everyone. That was a great chat. And thank you, Tim. That was a really interesting conversation.
Timoté Chanut (52:14.36)
Thank you, man. I appreciate the opportunity and everyone that I know raves about 4Play. you know, it was such a flex to saying to them that, hey, I'm going to speak with them today and be featured. was, yeah, that was the highlight of my day. So thanks for the opportunity and yeah.
Jack (52:28.653)
Yeah.
Jack (52:32.085)
Same with me, man.
Awesome. Thanks so much guys. Talk soon. Bye.
Timoté Chanut (52:38.21)
All right, bye bye.
