Why TikTok Is Planning To Build US Fulfillment Centers

October 21, 2022
2 min read

TikTok doesn't want to just teach you the latest dance moves. It wants to deliver your ecommerce orders too. 

In the past 2 weeks, the social platform posted dozens of job listings on LinkedIn for US-based fulfillment positions. 

"By providing warehousing, delivery, and customer service returns, our mission is to help sellers improve their operational capability and efficiency, provide buyers a satisfying shopping experience and ensure fast and sustainable growth of TikTok Shop," 1 listing reads

The goal, it seems, is to create an ecommerce supply chain to compete with Amazon. 

A TikTok spokesperson told Axios this program will feature "a selection of merchants which offer a range of product options as well as delivery options" in areas where it's offering ecommerce programs (like the UK).

While surprising, this move isn't totally unexpected. TikTok partnered with Shopify over a year ago to pilot a shopping feature in the US, Canada, and the UK. 

If you have the eyes (the app currently has 1B+ users) and can facilitate the sales (in this case, via Shopify), the next logical step would be fulfillment – no?

But that's where things get a bit questionable. Another job listing calls for someone who can help build this fulfillment network "from scratch." 

And while the unicorn likely has the cash to fund this initiative, setting up a massive fulfillment network in a foreign country comes with sizable risks. Namely, compliance. 

So, we can't help but wonder: Would TikTok be better off acquiring an existing 3PL provider (think: ShipBob)? 

Probably. 

Chances are good that the acquisition cost would likely be the same as setting up its own fulfillment network. And the established network would better position TikTok to take on Amazon, who's been fulfilling orders for decades. 

But this acquisition approach would also pose fewer threats to merchants (like you) who would ideally sell and fulfill through the app. 

After all, customers don't care who handles your fulfillment. If their order is late (which would be likely if TikTok runs into any compliance issues or struggles to get this thing off the ground), your brand is taking the hit. Not theirs.

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