Social Media · E-commerce
Turn videos into orders on TikTok Shop
Who can sell, what TikTok charges, how creators get paid and a worked profit example for 2026.
TikTok Shop for small business owners works differently from a website or Etsy: customers find your product in a short video or a LIVE stream, tap it and pay without leaving the app. Get the fees, creator commissions and shipping right, and a 30-second video can do the work of a storefront.
TikTok Shop is the shopping marketplace inside the TikTok app. It launched in the United States in September 2023. Sellers list products in Seller Center, then sell through their own videos, LIVE sessions, a shop tab on their profile and creators who promote products for a commission. TikTok handles checkout and payment.
Small sellers are a large share of the platform. TikTok told Modern Retail in May 2026 that sales from U.S. small businesses, which it defines as sellers with less than $15 million in annual revenue, grew 66% in 2025, and that more than 215,000 small businesses were actively selling, up 25% in a year. In June 2025, TikTok’s newsroom reported that more than a third of all U.S. TikTok Shop purchases each month in 2024 went to small businesses.
This guide covers who can sign up, what TikTok charges, how creator affiliates work, a worked profit example, and the federal and California rules every seller should know. If you sell handmade goods, compare it with our how to sell on Etsy guide before you choose where to start.
Why shoppers buy on TikTok Shop
TikTok Shop sells through discovery. People open the app to be entertained, see a product in use and buy on impulse or after a creator they trust recommends it. A May 2026 GlobalData survey of 6,000 U.S. consumers, commissioned by TikTok Shop and reported by Modern Retail, shows how strong that habit has become.
How U.S. shoppers use TikTok Shop
Source: GlobalData survey of 6,000 U.S. consumers ages 16 and older, April-May 2026, commissioned by TikTok Shop, as reported by Modern Retail on May 19, 2026.
The lesson for a small business: the video is the storefront. A clear demonstration, an honest before-and-after or a quick “how I make it” clip will sell more than a polished ad.
Who can sell and what you need to sign up
TikTok’s Seller University lists the requirements for U.S. individual sellers: you must be at least 18 and live in the United States. You need a U.S. passport or passport card, driver’s license, state ID or permanent resident card; the last four digits of your Social Security number, or an ITIN; proof of address; bank account details; and a W-9 for tax reporting. The phone number and email cannot already be tied to another shop, and TikTok says politicians cannot become sellers.
A sole proprietor with an Employer Identification Number can register as a sole proprietorship; one without an EIN signs up as an individual. If you plan to grow, get a free EIN from the IRS first; our how to get an EIN guide shows the steps.
Opening a TikTok Shop
- Go to the TikTok Shop sign-up pageSign up with your TikTok account or with an email or phone number.
- Choose your business typeIndividual, sole proprietorship or registered business.
- Verify your identityEnter your legal name, birth date and address and upload an ID that matches.
- Set up the shopPick a shop name, your main product category and contact details.
- Fix every flag and submitResolve the yellow caution marks on the review page, upload proof of address if asked and submit.
- List products and link your bankAdd clear photos, honest titles and prices, then set shipping and return policies.
- Post and go LIVELink products to your videos and LIVE sessions and invite creators to promote them.
Once a seller makes 200 or more sales of new or unused products and $5,000 or more in gross revenue on a marketplace within any continuous 12 months, federal law treats it as a high-volume seller. Since June 27, 2023, marketplaces must collect and verify that seller’s bank account, tax ID and contact information, and ask the seller to confirm it at least once a year. Keep your documents current so payouts are not held.
What TikTok Shop charges sellers
TikTok’s main charge is a referral fee on each order. Seller University says that starting April 1, 2024, the fee rose to 6% per order on qualified transactions, and its category table lists 5% to 6% depending on the category. The fee is figured on what the customer pays, including shipping, plus any platform discount and minus tax.
TikTok Shop costs for U.S. sellers (Seller University, Nov. 9, 2026)
| Cost | Amount | When it applies |
|---|---|---|
| Referral fee, most categories | 6% | Each order; base = customer payment plus platform discounts, minus tax, including shipping the customer pays |
| Referral fee, some jewelry and pre-owned items | 5% | Diamond, gold, jade, platinum and gemstone jewelry; pre-owned categories |
| Large sales in collectibles and pre-owned | 3% on the part over $10,000 | High-value single orders |
| Refund administration fee | 20% of the referral fee, capped at $5 per SKU | When an order is refunded |
| Creator affiliate commission | 1% to 80%, set by you | Only on sales a creator drives |
| Shipping and fulfillment | Varies | Depends on the shipping option you use |
Check your own rate before you set prices. Several seller-tool websites reported in 2026 that TikTok raised the standard U.S. referral rate to 8% on Aug. 4, 2026, but TikTok’s public category table still showed 5% to 6% when we checked on Nov. 9, 2026. Your Seller Center and settlement statements show the rate you actually pay.
Creator affiliates: paying for reach
TikTok Shop lets any creator promote your product in exchange for a commission you choose. In an open collaboration, any eligible creator can add your product; Seller University says you can set a rate from 1% to 80% per product, per group of products or for the whole shop, and a new rate takes effect 30 days after you edit it. In a targeted collaboration, you invite specific creators, and that rate overrides your open rate.
- Start with a rate you can afford on every sale, not the highest one you see.
- Send samples to creators who already post in your niche. Their audience matters more than follower count.
- Give creators talking points: the problem the product solves, how to use it and one honest limit.
A worked example: where a $35 order goes
Fees are easier to judge on a real order. Say you sell a $30 candle and charge $5 for shipping, and a creator’s video brings the buyer. This example uses the 6% rate, a 15% creator commission on the item price, $5 of postage and a $9 product cost.
Illustrative example: a $35 TikTok Shop order
Illustrative example. At an 8% referral rate the fee would be $2.80 and profit $13.70. Sales tax is left out.
Platform and creator costs on the example order
Illustrative example: $6.60 is about 19% of the $35 order. Without a creator, the platform cost is the 6% referral fee alone.
The point: creator sales can be your best channel, but price for them from day one. A product with a thin margin cannot support a 15% or 20% commission plus fees and postage.
Taxes and California rules
TikTok Shop income is business income. The IRS says payment apps and online marketplaces must send a Form 1099-K when payments exceed $20,000 in more than 200 transactions, and may send one for less. Either way, the IRS says you must report all income on your tax return. Once net earnings from self-employment reach $400, you also owe self-employment tax of 15.3%. Our side hustle taxes guide explains how to set money aside.
For sales tax, California’s Department of Tax and Fee Administration (CDTFA) says a marketplace seller whose sales all go through a marketplace facilitator registered with CDTFA generally does not need a seller’s permit, because the marketplace collects and pays the tax. Sell anywhere else too, such as at pop-up markets or on your own website, and you likely need one. Sacramento sellers should also check local rules in our Sacramento business license guide.
Tips to make your first sales
- Hook in the first two seconds. Show the product working before you explain it.
- Post often and learn from the numbers. Keep what earns clicks; drop what does not.
- Go LIVE on a schedule. Regular sessions build a returning audience.
- Ship on time. Late or canceled orders hurt your shop’s standing and reviews.
- Answer every comment and message. Questions in comments are buying signals.
- Bring in your other channels. Point Instagram and email followers to your shop; our Instagram for business guide shows how.
Common mistakes
- Pricing without commissions. Creator payouts and the referral fee come off the top of every sale.
- Ignoring refund costs. A refund returns the referral fee minus a 20% administration fee.
- Overpromising in videos. Health, beauty and earnings claims must be true and provable.
- Mixing personal and business money. A separate account makes taxes and payouts simpler.
- Selling outside the app without a permit. Direct sales in California usually need a seller’s permit.
Key terms
- Referral fee: TikTok’s commission on each order, 5% to 6% in its category table.
- Seller Center: the dashboard where you list products, manage orders and see payouts.
- Affiliate creator: a TikTok user who promotes your product for a commission you set.
- High-volume seller: a seller with 200 or more sales and $5,000 or more in revenue in 12 months under the INFORM Consumers Act.
- Marketplace facilitator: a platform that collects and pays sales tax on the sales it handles.
The bottom line: TikTok Shop rewards businesses that can show a product well on camera and ship fast. Start with a few products that photograph and demonstrate easily, price for fees and creator commissions, keep your tax records from day one and let the numbers tell you what to make next.
Free help in the Sacramento region
You do not have to work through these decisions alone. SCORE Sacramento pairs owners with volunteer mentors, many of them retired executives, bankers and accountants, at no cost. The Sacramento Valley Small Business Development Center offers free one-on-one advising on financing, budgeting and financial statements. The SBA’s Sacramento District Office can explain loan programs and connect you with lenders, and community lenders such as California Capital and Opening Doors serve owners who need smaller loans or extra support. Browse our Business Resources and the free business help guide for more.
Key takeaways
- TikTok’s public category table lists a 6% referral fee for most categories and 5% for some jewelry and pre-owned items; confirm your rate in Seller Center.
- TikTok said U.S. small-business sales on TikTok Shop grew 66% in 2025, with more than 215,000 small sellers.
- Creator commissions run from 1% to 80% and are set by the seller.
- In the example, a $35 order with a creator leaves $14.40 before your time.
- California sellers who sell only through a registered marketplace generally need no seller’s permit.
Frequently asked questions
How much does TikTok Shop charge sellers?
TikTok’s Seller University lists a referral fee of 6 percent per order for most categories and 5 percent for some jewelry and pre-owned items. Creator commissions, shipping and refunds add costs. Some seller sites report an 8 percent rate since August 2026, so check the rate in your Seller Center.
Who can sell on TikTok Shop in the U.S.?
Individual sellers must be at least 18 and live in the U.S., with a U.S. photo ID, the last four digits of a Social Security number or an ITIN, proof of address, bank details and a W-9. Sole proprietors and registered businesses can also apply.
How do TikTok Shop affiliate commissions work?
You choose a commission between 1 and 80 percent for products creators promote. Any eligible creator can join an open collaboration, or you can invite specific creators with a targeted rate that overrides the open one.
Do I need a seller’s permit for TikTok Shop in California?
CDTFA says sellers whose sales all go through a marketplace facilitator registered with CDTFA generally do not need a seller’s permit. If you also sell directly, such as at markets or on your own site, you likely need one.
Do I pay taxes on TikTok Shop sales?
Yes. The IRS says you must report all income whether or not you get a Form 1099-K, and self-employment tax of 15.3 percent applies once net earnings reach 400 dollars.
Sources
- TikTok Shop Seller University: TikTok Shop Referral Fee Updates (viewed Nov. 9, 2026)
- TikTok Shop Seller University: TikTok Shop Referral Fees in 2024 by Category (page updated 2026, viewed Nov. 9, 2026)
- TikTok Shop Seller University: How to register as an Individual
- TikTok Shop Seller University: Setting Up Affiliate Collaborations
- TikTok Newsroom: TikTok Shop is where shoppers come to discover (June 13, 2025)
- Modern Retail: TikTok Shop says sales from U.S. small businesses climbed 66% in 2025 (May 19, 2026)
- Federal Trade Commission: Informing Businesses about the INFORM Consumers Act
- California Department of Tax and Fee Administration: Tax Guide for Marketplace Facilitator Act
- IRS: Understanding your Form 1099-K (updated Oct. 28, 2026)
- IRS: Self-employment tax (Social Security and Medicare taxes)
Keep reading on Inksight
- Business Credit vs. Personal Credit: What Every Small Business Owner Should Know
- How to Choose a Business Structure in California: Sole Proprietorship, LLC, S Corp or C Corp
- Business Banking 101: How to Choose and Open a Business Bank Account
- Small Business Funding Options: Loans, Grants and Investors
- Business Resources: all guides →
