How to make money on TikTok, explained by a guy who does it

What Is Tiktok?

TikTok is a popular video-focused social networking platform that allows users to record, watch, and share short-form video content (ranging from 15 seconds to three minutes) of various genres using their smartphones. 

It is a user-friendly and creative application that generates compelling content (lip-syncing, dancing, pranking) by tapping into the imagination of its users through a variety of challenges. The app allows its users to add audio and visual effects, such as music and filters, and is known worldwide for its addictive appeal and high levels of engagement, all thanks to its unique AI system.

It was founded in 2016 by the Chinese company, ByteDance with the mission to “create an endless entertainment platform where anyone can contribute.” However, the platform gained significant traction in late 2017, when the company acquired a competitor app, Musical.ly, which transferred its 200 million users to TikTok. And since then, there’s no stopping. In a short span of four years, TikTok has surpassed 3 billion downloads and reached one-third of all social media users on the planet.

Here’s a brief timeline of Tiktok from its birth to when it joined the ranks of social media giants.

Tiktok Market Valuation and Investors

In 2018, SoftBank Group Corp. spearheaded a $3 billion fundraising round for TikTok in 2018, which included KKR & Co. and General Atlantic. During the fundraising round, ByteDance’s valuation increased to $75 billion.

As per the latest reports, In March 2020, Tiger Global Management became the most recent venture capital company to invest in TikTok. According to the Financial Times, ByteDance now has an implied valuation of $90 billion to $100 billion after placing its shares for sale on the aftermarket.

Video

Making Money on TikTok vs. Instagram and YouTube

YouTube pays creators a sum based on advertising dollars made by the platform from creator videos. TikTok, however, doesn’t have a specific equation for how creators are paid, making it more like Instagram. TikTok and Instagram allow creators to get paid by brands for creating sponsored content. 

For some creators, this could create a barrier to getting paid — you need to establish a relationship with brands and convince them your content is worth their money. If you need to make money fast, the process of monetizing your following by establishing an audience and connecting with brands might take too long for you. 

Other creators feel this strategy opens doors, as it allows them to eventually maximize earnings with any businesses that are interested. 

TikTokInstagramYouTube
Active Monthly Users (Worldwide)Nearly 700 millionMore than 1 billionMore than 2 billion
Monetization OptionsProduct salesBrand partnershipsTikTok Creator’s FundHost a livestreamProduct salesBrand partnershipsAd money as a YouTube PartnerProduct salesBrand partnershipsChannel memberships
Barriers of EntryNeed a smartphoneNeed relationships with brandsNeed a smartphoneNeed relationships with brandsCould need graphic design or photo editing knowledge to succeedNeed a smartphoneTypically, high-production videos perform better. Might need audio or lighting equipment.

Related: How to Make Money on YouTube

Really, How Much Do TikTokers Make?

Here’s how much the highest-paid TikTokers made in 2021:

CreatorRevenue
Charli D’Amelio$17.5 million
Dixie D’Amelio$10 million
Addison Rae$8.5 million
Bella Poarch$5 million
Josh Richards$5 million
Kris Collins$4.75 million
Avani Gregg$4.75 million

These TikTokers are likely making a lot of money from strategies aside from the TikTok Creator Fund. 

Normally,  30% to 50% of a TikToker’s earnings come from sponsored posts, with some of them charging $100,000 to $250,000 per post. 

Making money on TikTok could be a hit or miss, but luckily there’s more than one way to do it.

Strategy No. 3: Get Paid by TikTok Itself

TikTok’s parent company ByteDance launched a $200 million creator fund in summer 2020, but the payouts from this fund are modest. Industry consensus is that TikTok will pay you two to four cents per 1,000 video views. 

It’s never a good look for your app when a popular creator posts a video saying you suck, as Hank Green did in January 2022 with a YouTube post entitled “So… TikTok Sucks.” Since TikTok is growing like wildfire, more users mean more videos, and more videos mean more competition for the same pool of money. Consider pairing this strategy with one of the other previously mentioned approaches to diversity your money-making efforts.

Additionally, if you have a knack for making videos that go viral, you may want to take that same skill set and apply it on a platform that has heftier rewards for such a skill set, such as YouTube or Instagram.

No matter what strategy you decide to pursue, finding success on TikTok long-term will be contingent on you posting content you actually want to create week in and week out.

“Don’t try to be like someone else already on the platform,” says Farzin. “That’s rule number one. Talk about the subjects that you really are passionate about, be authentic, and be yourself.”

Summary: How to Monetize TikTok in 2021

Learning how to get paid on TikTok isn’t sophisticated or tricky.

The main thing to keep in mind is that you need amazing content that people love, and you need to work hard at continuously growing your following.

If you approach it with the right mindset, and you’re willing to learn as you go and pay close attention to what’s working and what isn’t, you’ll be making money before you know it.

To recap, here are 7 ways to start making money on TikTok:

  1. Become a TikTok Influencer
  2. Grow and Sell TikTok Accounts
  3. Publish Sponsored Posts
  4. Sell Your Own Products
  5. Collect Donations
  6. Become a TikTok Consultant
  7. Start A TikTok Talent Management Agency

What steps have you taken to monetize your TikTok account? Let us know in the comments section below. 

Start selling online now with Shopify

Start your free trial

Frequently asked questions

Can you make money on TikTok?

Yes, you can make money on TikTok by joining the Creator Fund, posting sponsored content, and selling merchandise or product lines to your audience. 

How do you get paid on TikTok?

You can make money on TikTok by joining the Creator Fund and selling merch/products, but the most lucrative method is by posting sponsored content. So, the best way to make money on TikTok is by partnering with brands to create niche, sponsored content. 

What type of content performs best on TikTok? The type of content that performs the best on TikTok is entertainment content. Typically, the highest-performing videos are funny and on-trend.

How much do TikTokers make in 2022?

As seen above, there are many ways to make money on TikTok and how you decide to monetize your content will determine your earnings.

Brand partnerships on TikTok can make you upwards of $80,000. That’s right — if you’re a big enough creator (with a large and engaged audience and a track record of success on the platform), you can buy an expensive car with your earnings from one video.

As for the TikTok Creator Fund, you can earn between 2 and 4 cents for every 1,000 views. This means you might expect $20 to $40 after reaching a million views.

Learn more about the TikTok Creator Fund here.

Strategy No. 1: Direct Users Off the Platform

Clickthrough rates on TikTok seem low compared to other platforms, but Farzin, whose strategy relies mainly on affiliate link commissions, believes this has more to do with the app still being new and having unusually high post reach.

“My conversion rate is anywhere between 10 and 15 percent,” he says. “Watching the video, going to my bio, and clicking on the link, there are three or four clicks until they get to that product. It’s phenomenal that they follow through.” 

Farzin emphasizes that valuable content is the key. “It’s about that value-driven content. When people land on my page, they’re able to say ‘Okay, this guy does products, but there are also some other categories, too. Maybe I should follow him.’”

TikTok profiles allow for only one hyperlink, but there are several free services that can turn your one link into many links. LinkTree, Lnk.bio, and Milkshake are popular options.

How many views do you need to get paid by TikTok?

To start earning money directly from TikTok, you must be 18 years or older, have at least 10,000 followers, and have accumulated at least 100,000 video views in the last 30 days.

The Importance Of Being Authentic

Even though Tiktok offers a lot of monetization opportunities, it makes sense to be authentic and engage with your audience for the long haul. The fact is you can’t use TikTok to make money without having an audience base that has a strong affinity towards you.

This means engaging with one’s audience by commenting on their videos, sending hearts, following them back, and being active on TikTok every day.

Authenticity is not merely essential for becoming a top TikTok creator. It is also another way to make money on the platform as big brands and advertisers prefer sponsoring creators with high engagement (like likes, comments) on their videos.

As a result, your content needs to be something that people will actually want to watch – whether it’s a tutorial video or a lip-sync video or a dance video – you need to have an organic connection with the audience if you want them to engage more often.

In addition, being authentic not only makes you stand out from other active users but also helps influencers create more personable relationships with their audiences. And of course, brands love working with such influencers because they can relate better with consumers. In the end, it all goes back to the importance of engagement.

Partner with a brand

A more lucrative strategy to make money on TikTok is partnering with a brand. If you’re a big enough creator, have many engaged followers, and have a track record of exposure, you can make upwards of $80,000.

5 Strategies To Making Money on TikTok

After achieving a large following, you can begin the journey of monetizing TikTok. Below are 5 strategies that will help you start earning that income:

  1. Apply to TikTok’s Creator Fund. TikTok’s Creator Fund, worth $200 million, is one of the most direct methods of making money on TikTok. But before you submit your application, there are a few boxes you have to tick. The requirements include: Users must be 18 years or older, have a baseline of 10,000 followers, accrued at least 100,000 video views in a 30-day period, have TikTok Pro, and lastly, live in the US, UK, France, Germany, Spain or Italy.
  2. Advertise Your Products. Already have merchandise? You’re in luck. Advertising your product on TikTok is the most obvious means of making money in this space. Whether you’re selling a hard good like apparel or digital goods like online yoga classes, create content that shows off your products. Don’t forget to include a link to your website in your bio!
  3. Partner with an Influencer. Perfect for established businesses, small or large, partnering with an influencer is an excellent way to grow your brand presence on TikTok. Before reaching out to an influencer to work with them, make sure their content aligns with your brand. If you’re in the U.S., utilize the TikTok Creator Marketplace to find the right influencer for you.
  4. Partner with a Trusted Brand. The opposite of partnering with an influencer – another brand may approach you to post content sponsored by them. In exchange for your post, they compensate you either via money or a free service or product. Remember, when posting your own sponsored content, tap the Branded Content toggle to ensure you’re being transparent with TikTok and your audience. You risk having the post removed if you don’t!
  5. Accept Donations. Hosting live streams is another direct way of earning money on TikTok. During live streams, followers can donate gifts, purchased with virtual coins that are bought on the platform. The TikToker can then convert the gifts into “diamonds” (TikTok’s virtual credits) and cash them out to a PayPal account. But, there are two stipulations – creators have to be 18 years old or over, and for followers to purchase coins, they also have to be at least 18 years old.

Tags