A TikTok Ban Could Mean Millions Lost for Small-Business Owners
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What is the main topic discussed in this episode?
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Here's your Money Briefing for Monday, February 3rd. I'm Mariana Asburu for The Wall Street Journal.
I really started posting on TikTok during the pandemic, and my business just completely blew up.
How did one small business grow from $20k to $4M using TikTok?
That's Elise Burns. She's a 27-year-old small business owner in North Carolina. She's been selling floral-inspired art goods like stickers, stationery, and laptop sleeves online since she was 18.
I've been on Instagram for a while, but TikTok is really kind of what... Got me a lot of traction. That is what really took my business to like the next level of being possibly like a full time job for me. So I did $20,000 in revenue on Etsy in 2019. And then I did $360,000 in revenue on Etsy. etsy in 2020 after i got on tick tock so that was just this huge huge jump that made me think it could be a full-time job and then 2021 i did 1.2 million 2022 i did 1.8 million 2023 i did 2.9 million and then in 2024 we hit 4 million dollars in revenue
Behind the viral memes and trendy dances, a growing number of shop owners, like Elise, have capitalized on the platform and created lucrative businesses by connecting with customers on TikTok.
What share of sales do shop owners like Elise attribute to TikTok?
But the looming threat of a possible U.S. ban on the app would be a serious hit to her income. Elise said 25% of her sales come from TikTok shop, with the bulk coming from direct website sales.
I was like, dang, if this is gone for like even a week, that's, you know, 10, 15, $20,000 that could be just kind of evaporated. The circumstances of the whole thing is still just like keeping me pretty nervous. So while I have these other sources of revenue and these other ways to reach people, my email list, Instagram, YouTube, you know, it doesn't mean that I'm going to be able to reach all of them. And my business relies on reaching everybody right now.
What is the current legal and app-store status of TikTok in the U.S.?
So what does the uncertainty around TikTok mean for the businesses relying on it? Wall Street Journal reporter Anne-Marie Alcántara wrote about it. And she joins me after the break.
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The future of TikTok remains unclear, and the millions of dollars that some shoppers are making off the app are at risk. Wall Street Journal reporter Anne-Marie Alcántara joins me to talk through it. Anne-Marie, where do things currently stand with TikTok?
So the app is back in action.
How would a TikTok ban disrupt inventory, warehouses, and leases for shops?
However, if you deleted it or removed it from your phone, you can't download it again still. It's still not in the app stores, but... If you had it, you can use it as you normally would have. And President Trump has also extended this decision making around the app. And it's unclear if there's going to be a buyer, if there's going to be more challenges or if TikTok will go away once again. And how is this uncertainty and possible ban affected businesses who rely on the app? They just don't know what to say to the customer. You know, it's like, should they run more sales to clear their inventory for TikTok shop? Some business owners I spoke to mentioned how they expanded their warehouses earlier. and inventory to market to the TikTok shop consumer.
And now if that goes away, they still have rent to pay and leases that they sign. And so it's also a confusing time for them. And where do they pivot? Who do they reach out to now for customers? That's a very, very uncertain time.
Yeah. And on the customer side, you're not sure if your favorite shop is going away, where to go next with them. So it seems like confusion on both sides.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:00–0:49
2
How did one small business grow from $20k to $4M using TikTok?
0:49–1:56
3
What share of sales do shop owners like Elise attribute to TikTok?
1:56–2:34
4
What is the current legal and app-store status of TikTok in the U.S.?
2:34–3:38
5
How would a TikTok ban disrupt inventory, warehouses, and leases for shops?
3:38–4:46
6
What revenue programs and monetization tools does TikTok offer creators and businesses?
4:46–6:15
7
Why does TikTok’s algorithm make it uniquely effective for small-business discovery?
6:15–7:16
8
What steps can social-media businesses take to prepare if TikTok disappears?
7:16–8:50
Speakers
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