This is How TikTok Shop Killed the Multi-Level Marketing Model

TikTok shop has had an outstandingly large impact on the beauty industry. 

It is hard to imagine that just a few years ago the future of TikTok shop was dubious; industry leaders doubted that its model would properly take off with Western audiences, who were suspicious of the platform. 

Fast-forward to today and TikTok Shop’s impact is immense. Almost every consumer has some form of experience with the feature, especially when it comes to beauty products. 

Yet the success of TikTok Shop also means the downfall of more traditional beauty shopping avenues. In particular, multi-level marketing model (MLM) brands, which focus on peer-to-peer sales.

Let’s take a look at how TikTok Shop has changed the beauty industry and the threat it poses to traditional MLMs. 

MULTI-LEVEL MARKETING MODEL VS TIKTOK SHOP

Rodan + Fields, a prominent multi-level marketing model company, has announced that it will be changing its structure to a new affiliate program. This change is indicative of a broader shift in the beauty industry, where consumers are more likely to make purchases from TikTok Shop than traditional shopping avenues. 

Once upon a time, consumers would shop for their latest beauty finds in stores. They’d chat to their friends, take recommendations from store clerks, and make their decisions from there. As such multi-level marketing model brands became impressively popular, as they played into this peer-to-peer approach, using friendly faces to push consumers to purchase. 

@becamichie

Newest addition to my Skincare Journey: Collagen Wrap Mask🍒😭💗 It locks in moisture and shields against acne-causing bacteria while I sleep. Obsessed with glass glow skin!🌙✨ @medicube_official @Medicube Global #medicube #tiktokshop #medicubepartner #tiktokshopfindsfyp #tiktokshopproducts #collagenwrap #kbeauty #skincare #koreanskincare

♬ original sound – Beca

However, this model was far from perfect, albeit being profitable. Multi-level marketing model practices often led to uncomfortable personal interactions, which had great potential to harm brand reputations. 

When TikTok Shop came around, suddenly consumers were able to take beauty recommendations from the people they trusted most in the world; influencers. 

Through TikTok Shop, brands can easily have creators promote their products. Creators, in turn, receive quick and efficient monetisation for their efforts. On top of this, influencer-created brands have a soft place to fall, amongst other online brands. 

@barebyvogue

Tiktok Shop has FINALLY LANDED here in IRELAND launching on MONDAY and we’re celebrating BIG! ⭐️ One lucky winner is about to WIN A YEAR’S SUPPLY of Bare By Vogue Tan😍 How to ENTER: FOLLOW @barebyvogue on Tiktok TAG your bestie below 👯‍♀️ SHARE this post to your stories and tag us 📲 TUNE into our Tiktok live on Monday!! (Keep an eye out 👀) The winner will be announced next Friday 13-12-24💥 Good luck!! 💝 T&C’s apply. *Exclusive to those living in Ireland* & winners will be contacted directly via DM. Please be aware of fake accounts – we will only contact you through our official page #tiktokireland #barebyvogue #giveaway #competition

♬ Hyper Electro Pop – SOUND BANK

Consumers have become increasingly fond of TikTok Shop for several reasons. For one, as previously mentioned, brands have been quick to engage the help of influencers to promote their products on TikTok Shop. Consumers trust the opinion of their favourite creators as they would a family member or friend, and thus are statistically more likely to make a purchase based on their recommendations. 

Furthermore, TikTok Shop is built directly into the app. As such, it is seamless for consumers to click through to the shop from an influencer’s video, for example. This frictionless journey is incredibly important to modern consumers, who are easily deterred from making a purchase by any form of difficulty or complication. 

As such, multi-level marketing model brands truly stand no chance in this new, modern world. Consumers view these companies as less genuine than the influencers they see on their screens. TikTok Shop allows brands to create an authentic connection with their audiences, through heartfelt anecdotes told by content creators. There is an innate irony here, as this is the same line of thought that first made multi-level marketing model brands popular; person-to-person connection. 

@madebymitchell

SHOP NOW. 💋✨❤️‍🔥💅💕 #madebymitchell #blursh #fyp #viral #TikTokMadeMeBuyIt #lipstick #makeup #mua #lipcombo #makeuphacks

♬ original sound – madebymitchell

Yet, as much as they may try, multi-level marketing model ambassadors will never have the same connection nor sway with modern audiences as influencers do. Influencers spend decades crafting close relationships with their audiences. Consumers view these creators, who they have never met in most cases, as close personal friends; MLM models can simply not replicate this.

THREATS TO TIKTOK SHOP

This does not mean that TikTok Shop is immortal. Quite the opposite. The platform is already seeing changes to its functioning in the form of smaller creators. 

Major influencers with hefty brand deals are beginning to lose their lustre in consumer’s eyes. This is creating a path for smaller, lesser-known creators to step through, who can more freely give their honest opinions. These creators are driving hefty amounts of purchases on TikTok Shop, as consumers take their recommendations as gospel; not truths tinted by brand paycheques. 

@romymorris.x

Tik tok shop can take all my money 💳💳 #tiktokshop #tiktokshophaul #viralmakeup

♬ original sound – Romy Morris

Ultimately, the days of multi-level marketing models are over. This ancient model no longer works for modern consumers. These days, audiences want genuine opinions from people they trust – and that means influencers and lots of them. 

For multi-level marketing model brands trying to plot their next move, one of the many wonders of TikTok Shop is its low barrier to entry. The platform is simple to use and truly any brand can begin selling on it successfully. 

Popularity on TikTok Shop, however, is a bit of a tougher nut to crack. Brands must engage with influencer partnerships to drive conversions and build trust in their brand. Emphasise micro and nano creators who have closer relationships with their audiences, and are thus more trusted. These will be the secret ingredient to your successful TikTok strategy.

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