TikTok Names Fulfillment Partners Behind New Shopping Platform
TikTok launched the in-app e-commerce platform TikTok Shop earlier this month, where consumers can purchase products seen in live videos or tagged in content.
Aiming to close 2023 with $20 billion in annual online merchandise sales, more than quadruple the $4.4 billion in gross merchandise value (GMV) sold in 2022, TikTok is padding its logistics and fulfillment capabilities to try to meet that target.
More from Sourcing Journal
Retail Tech: Amazon Invests $4B in AI Startup, Shopify Expands Wholesale with Faire
Warehousing Startup Linked to Walmart, Ralph Lauren Cuts 33% of Workers
Though some thought it would build its own logistics network, the Bytedance-owned company is working with several companies to drive its U.S. fulfillment strategies. These include third-party logistics (3PLs) providers ShipBob, Flowspace, as well as the fulfillment wing of online electronics retailer Newegg, among others.
Brands, merchants and creators selling on TikTok Shop can leverage ShipBob’s AI-driven omnichannel fulfillment engine, 50 fulfillment centers and expertise to enhance nationwide inventory storage, order fulfillment and shipping.
Merchants don’t have to store all of their SKUs at a third-party warehouse, or use FBT for all of their products; they can pick and choose what they want to store and ship through FBT.
ShipBob said it has already fulfilled “hundreds of thousands” of orders through its integration with TikTok Shop since the solution was made available for testing earlier this year.
When customers place an order with a participating seller on TikTok Shop, ShipBob will pick, pack and ship the order.
TikTok sellers can use ShipBob‘s services to offer customizable badging options, including free shipping, express shipping and flash sales, to help increase conversions. This badges help brands stand out compared to competitors who aren’t using “Fulfilled by TikTok.”
A merchant that’s live on TikTok Shop can start selling with “Fulfilled by TikTok” within a day of getting inventory to ShipBob. These sellers can then access “highly competitive shipping, fulfillment and storage rates,” according to the omnichannel fulfillment provider.
Because merchants aren’t operating their own warehouses, they should be able to sudden demand spikes from flash sales, viral videos and Black Friday/Cyber Monday promotions, for example.
E-commerce fulfillment provider Flowspace offers similar services to ShipBob, but it’s not attached to the “Fulfilled by TikTok” program, according to the terms of its TikTok Shop deal. Instead, Flowspace is part of the TikTok Shop Partner Program. This means its software is directly integrated with the TikTok Shop API, enabling sellers to manage inventory and offer more consistent and efficient fulfillment.
Merchants gain access to Flowspace’s OmniFlow fulfillment management software, which offers centralized, real-time visibility and control across inventory, orders and fulfillment activity.
With 150 facilities, Flowspace powers omnichannel fulfillment for merchants across varying channels, from social media platforms like TikTok, direct-to-consumer retailers or marketplaces.
During onboarding, sellers can match their Flowspace product SKUs to their catalog with TikTok Shop.
TikTok also integrates with apps that power fulfillment for e-commerce merchants, including Easyship, WebBee, Pipe17 and AfterShip.
TikTok’s fulfillment outsourcing move comes as warehousing costs keep rising. Rent jumped 16.1 percent in the second quarter of 2023 to an average asking price of $9.59 per square foot, according to real estate services firm Cushman & Wakefield. This a more than 50 percent increase since the spring of 2020, when rates averaged $6.58.
Industrial real estate vacancies rose to 4.1 percent in the second quarter in response to rising rent.
Holding product has gotten more expensive too. Inventory carrying costs, including storage, jumped 52 percent to $759.3 billion in 2022, marking the highest cost growth over the past decade, according to The State of Logistics Report from the Council of Supply Chain Management Professionals (CSCMP) and Kearney.
This illustrates why companies interested in growth would avoid owning their fulfillment network, much like TikTok.
TikTok Shop is also available in the U.K., where e-commerce fulfillment services provider Huboo powers Fulfilled by TikTok. It was the platform’s first official fulfillment partner.
