Why the UGC market is expanding now

TikTok Shop is heading for the Nordics. At the same time brands are building their own creator networks. That means more ways to get paid for what you already do. Here is the whole map.

Daniel Johansson 7 min read
Grafiskt omslag i UGC-guidens färger med ordet Nyheter

There are more ways to make money from UGC now than there were a year ago, and there will be more over the coming year. This piece is a map of them: what they are called, how they work and who they suit.

Something is opening up

The Swedish retail trade paper Market reported in April that TikTok is preparing its shopping product, TikTok Shop, for launch in the Nordics. It already exists in a number of European countries. When it arrives, the product can be tagged directly in the video and the purchase happens inside the app.

That sounds technical. It is economic. Today your film ends with someone having to leave the app, click onward and find the right page, and most people do not. When the purchase instead happens where the film is playing, it becomes possible to see which video sold. And what can be measured can be paid for.

What is actually possible

Hudson Leogrande dropped out of school at 16 and ended up homeless. He stayed with a friend in a one-room flat. He started his first company in his late teens (home teeth whitening kits), and it took off on a single post from a creator on Snapchat. Around 4,000 dollars in sales in a day.

At 26 he started Comfrt, weighted loungewear built to feel like a hug, with 50,000 dollars of his own capital. This year the company is heading for a billion dollars in revenue. He now sits on the board of David Beckham's health company IM8.

What makes the story interesting for us is not the numbers. It is how the company is marketed: a core network of 500 creators making films about the brand. Not five hundred celebrities, five hundred ordinary people with a camera and an audience that trusts them.

Five hundred places. Someone was first. That is the whole point of this piece: those places exist, they will exist here too, and they go to the people who are already going.

Five ways to get paid

Most creators know about one of them. That is why most earn less than they could.

1. Flat fee per film

You deliver material, they pay an agreed sum. Safest, most predictable, and the right choice when you know nothing about how well the brand sells. Almost everyone starts here, and for many it is the whole business.

2. Commission on sales

You get a share of what sells through your link or your code. Across European markets the levels usually sit between ten and twenty-five per cent. The ceiling is higher than with a flat fee, and the floor is zero. Suits you when you believe in the product and know your audience.

3. Fee plus commission

The arrangement almost nobody proposes for you, and often the best one. You get something regardless of how it goes, the brand pays less up front, and both of you gain if the film performs. Ask for it. The answer is yes surprisingly often.

4. Gifting that becomes a collaboration

A brand sends the product with no strings attached. If you like it and make a film of your own accord, you may then be offered commission. That is how Comfrt built its network, and it is an honest setup: you promised nothing, and they only get films from people who actually like the product.

5. Your material as an ad

If the film works organically, the brand often wants to run it as a paid ad. That is a separate deal with a separate price tag: the usage rights. Many creators give them away for free without realising. Whoever understands what they are worth can double the income from material that already exists.

It is already happening

Brands are not waiting for TikTok. Breakit has reported that the Swedish beauty chain Lyko is recruiting creators to its own app and thereby challenging TikTok. More will do the same, because everyone has understood the same thing: whoever owns the relationship with the creators owns the marketing.

For you that means TikTok Shop is not the only door. It becomes one of several.

Three things to have straight first

None of them is hard. All three cost money if they are missing.

  • Know what you cost. Work out your hourly cost once, and you will know in ten seconds whether an enquiry is worth answering.
  • Disclose what is advertising. An affiliate link makes the post advertising and it has to be visible immediately. That applies even when the payment is only a product.
  • Set money aside for tax. Commission is taxable income even when it is small and arrives in lumps long afterwards. The rules differ by country, so check yours.

Why we exist

I have built e-commerce and commissioned content from creators for years, and what strikes me every time is how much is decided by information nobody shares. What things cost. What you are allowed to say no to. Which arrangements even exist.

That is why we do this. The programme is four tracks, and track 0 is led by behavioural scientist Nina Jansdotter, because what stops people is almost never the camera, it is daring to use it. Tracks 0 and 1 are free and need only an account.

Ahead of what is coming we have added a course on commission and affiliate: how to work out whether it pays, how the tracking works and what to ask before you say yes. That one is free too.

There were five hundred places in Comfrt's network. There will be equivalents in every market, and they do not go to those who wait.

Start with the tracks

Sources

ugcthe markettiktok shopcommission

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