TikTok has grown to become one of the most popular social media platforms in the world, with over 1 billion monthly active users. The app allows users to create and share short videos, often set to music or featuring lip-syncing, dancing, comedy sketches, and more. Thanks to its fun, entertaining format and powerful algorithms that determine which videos go viral, TikTok has cultivated a massive global audience.
For many creative users, TikTok also presents an exciting opportunity to turn their passions into a career. The platform enables emerging artists, performers, influencers and more to build substantial audiences and make money in ways that weren’t possible before TikTok. There are now thousands of TikTok creators earning incomes from their content. With the right strategy and effort, almost anyone can monetize their following and talents on TikTok.
How TikTok Creators Make Money
There are several ways TikTok creators can monetize their content and earn money on the platform:
Sponsored content and brand deals are a major source of revenue for top creators. Brands will pay popular TikTokers to promote their products in dedicated sponsored posts and videos. Rates can vary greatly based on the creator’s follower count and typical engagement, but commonly range from $10,000-$20,000 per sponsored post for creators with millions of followers.
The TikTok Creator Fund is a program where creators receive payment from TikTok based on the engagement and views on their videos. TikTok sets aside a large fund monthly and divides it among qualifying creators. Payout amounts start at only a couple cents per thousand views initially, but can increase up to $0.10 per thousand for consistently top-performing creators.
TikTok LIVE allows creators to earn monetary gifts from viewers during livestreams. Fans can purchase coins via in-app purchases and use them to send digital gifts, which can then be exchanged for real money. Top gifters often spend hundreds or even thousands on gifts for their favorite creators.
Affiliate marketing allows creators to earn commissions by promoting products from brands they have affiliate partnerships with. Creators incorporate affiliate links or codes into their videos and descriptions, and receive a percentage of any sales driven by their audience.
TikTok Creator Fund
The TikTok Creator Fund is a way for popular creators on the platform to earn money directly from TikTok. It was launched in 2020 as a $200 million fund to support creators in the US over the course of a year. The amount has since been increased to over $1 billion to support creators globally.
To be eligible for the TikTok Creator Fund, creators must meet these requirements:
- Be 18 years or older
- Have at least 10,000 authentic followers
- Have at least 10,000 video views in the last 30 days
- Post original content that follows TikTok’s community guidelines
TikTok calculates payouts based on a number of factors:
- The number of video views
- The level of engagement on videos
- Adherence to best practices for creating quality content
Payouts are made monthly if creators meet the minimum eligibility each month. The Creator Fund provides an additional way for popular TikTok creators to monetize their audience on the platform.
Sponsored Content
Popular brands like Chipotle, Quaker Oats, Hyundai, Disney, and Old Spice have all partnered with TikTok creators to promote their products and services through sponsored content.[1] Sponsored posts allow brands to leverage a creator’s audience and tap into the platform’s highly engaged users.
According to research, the average cost for a sponsored post on TikTok can range from $100 to $200 for creators with 100,000 to 500,000 followers. Micro-influencers with 10,000 to 50,000 followers typically charge around $50 per sponsored post.[2] The top creators with millions of followers can earn several thousand dollars for a single branded video.
When setting rates, sponsors and creators consider factors like audience demographic, typical engagement, video production quality, and sponsorship exclusivity. Overall, sponsored content provides a lucrative way for brands and creators to partner and promote products on TikTok’s popular platform.
TikTok LIVE Gifting
TikTok allows viewers to send virtual gifts to creators during LIVE videos as a way to show appreciation and support. Gifts can be purchased using TikTok Coins, with 100 coins equaling approximately $1 (https://megadigital.ai/en/blog/tiktok-live-gifts/). There is a wide selection of gifts available at different coin price points. Some of the most popular include the Drama Queen (599 coins), Rock On (999 coins), and Sunshine (1499 coins) (https://www.tiktok.com/creators/creator-portal/en-us/getting-paid-to-create/live-gifting/).
The most gifted TikTok creators earn substantial revenue from LIVE gifting. Top earners like @Spencerx, @Thehypehouse, and @Avanimuser have received gifts totaling over $1 million in value (https://screenrant.com/tiktok-gifts-real-price-explained/). The Universe gift, costing nearly 35,000 coins, is the most expensive at around $525. While most gifts are smaller, popular creators can rack up significant earnings over time from their loyal fanbase.
Affiliate Marketing
Affiliate marketing has become a popular way for TikTok creators to monetize their content and audience. Many creators include affiliate links in their bios or posts, allowing them to earn a commission when followers purchase products through those links.
Some of the most commonly promoted affiliate products on TikTok include:
- Beauty and cosmetics – Creators often promote makeup, skincare, hair, and other beauty products.
- Fashion and accessories – Clothing items, jewelry, bags, and other accessories are frequently featured.
- Home goods – Home decor, furniture, appliances, and organizational products get promoted by lifestyle creators.
- Tech gadgets – Tech reviewers and unboxers share affiliate links to headphones, phones, laptops, and gaming accessories.
- Amazon products – The Amazon influencer program allows creators to earn commissions on any products bought through their links.
- Online courses and services – Educational content creators promote affiliate e-courses, membership sites, and other info products.
By including affiliate links strategically in their content, TikTok creators can earn substantial income through commissions from resulting sales.
Ad Revenue
TikTok allows creators to make money by displaying in-feed video ads on their content. Through the TikTok ad partner program, creators can monetize their videos once they hit a certain viewership threshold. TikTok displays native video ads within a creator’s content, and the creator earns a cut of the ad revenue generated.
According to Gupta Media, the average TikTok CPM (cost per thousand impressions) in 2022 ranged from $10-$30. However, TikTok CPM rates can vary significantly based on factors like audience, content type, seasonality, and more. In general, TikTok ad rates tend to be lower than mature platforms like Facebook and Instagram. Overall ad revenue earned will depend on the creator’s viewership and consistency in posting engaging content.
Merchandise
Selling custom merchandise is another lucrative way for TikTok creators to monetize their audience. Many popular creators on the platform have launched their own merchandise lines, featuring t-shirts, hoodies, phone cases and other items branded with their logos, catchphrases or meme images.
Profit margins on merchandise can vary greatly depending on the items sold and business models used. Creators often partner with print-on-demand companies like Teespring that handle production and fulfillment, allowing easy setup but smaller margins. According to Teespring, creators typically make $2-$5 profit per t-shirt sold this way.1 Doing merchandise in-house can require more investment but lead to higher margins of $10-$20 per item.
Top merchandise sellers on TikTok likely earn thousands per month, especially those with popular branded products and high demand. But the profit potential scales with fanbase size. Even creators with smaller followings can tap into merchandise sales to supplement other TikTok income streams.
Highest Earning TikTok Creators
When it comes to earnings, these TikTok creators are at the top:
Charli D’Amelio
With over 133 million followers, Charli D’Amelio is the highest earning TikTok creator. According to Forbes, she earned $17.5 million in 2021 from sponsored content, the Creator Fund, and other monetization methods. Charli gained mass popularity in 2019 through viral dance videos.
Addison Rae
In second place is Addison Rae, earning an estimated $8.5 million in 2021. She has over 88 million followers. Addison Rae grew an enormous TikTok following posting dance videos and collaborations. She earns through brand sponsorships, acting, merchandise, and more (source).
Spencer X
Known for beatboxing videos, Spencer X made an estimated $7 million in 2021. He has over 51 million followers. Spencer X generates income through live performances, branded content deals, merchandise sales, and other opportunities.
Conclusion
TikTok offers creators several ways to monetize their content and turn their accounts into potential sources of income. The main methods covered in this article include the TikTok Creator Fund, sponsored content deals, LIVE gifting, affiliate marketing, ad revenue sharing, merchandising, and more. While it’s possible for some top creators to earn a livable wage from these monetization strategies, it’s rare for most TikTokers to get rich or make six figures solely from the platform.
The TikTok Creator Fund provides a baseline income for qualifying creators, but the monthly payouts are modest. Sponsorship opportunities from brands can be lucrative, but are highly competitive. Niche monetization options like LIVE gifting and affiliate links add up, but rely on having a sizable and engaged following. Even hugely popular TikTok stars may struggle to maintain relevancy and viewership over time. While the platform offers real money-making potential, consistently profiting from TikTok requires creativity, perseverance, and a bit of luck.
In summary, while TikTok presents exciting new ways for creators to earn income online, the odds are stacked against achieving financial freedom purely as a TikTok influencer. But for creative souls willing to work hard and leverage multiple revenue streams, TikTok can become a fruitful source of supplemental or even full-time income. The key is strategically capitalizing on one’s niche audience and skilfully navigating TikTok’s monetization programs.
