Now, a major change to TikTok Shop’s shipping policy is forcing Okamoto to shift gears.

TikTok Shop told U.S. merchants that it is discontinuing independent shipping in an email sent last week and reviewed by Modern Retail. The change, which is rolling out in stages starting Feb. 25 and is expected to be completed by March 31, according to the memo, will require sellers to fulfill orders through TikTok Shop’s proprietary logistics services. This includes Fulfilled by TikTok, also known as FBT, where merchants send inventory to TikTok’s warehouses, and the company handles storage, picking, packing and shipping in exchange for a fee based on the number of items sold and their physical size.

Alternatively, brands may use other platform-controlled shipping options like Upgraded TikTok Shipping, where TikTok automatically chooses the carrier, and Collections by TikTok, a door-to-door pickup service.

Brands selling on TikTok Shop have been able to handle fulfillment on their own since the platform’s U.S. debut in 2023. Under the new policy, sellers who are not fully transitioned to TikTok’s logistics system by the end of the rollout risk losing access to a crucial sales channel that puts brands’ products in front of some 170 million users. TikTok is allowing limited use of approved third-party software — including AfterShip, 4Seller and ShipHero — but only if those tools are fully integrated with TikTok’s logistics ecosystem.

Some brands and consultants who spoke with Modern Retail TikTok’s logistics services have historically been uneven, with merchants citing operational errors, shipping delays and limited support when problems arise. Others said moving inventory into TikTok’s fulfillment network could raise costs, squeeze margins and make it harder to offer the steep discounts TikTok shoppers often expect.

For Okamoto, the change is enough to push Matching off the platform altogether. Unlike August, which operates at a much larger scale, Matching is a small, newly launched brand that is still building out its business. The company fulfills orders directly and does not carry enough inventory to justify the added costs and operational complexity of TikTok’s logistics services like FBT.

“It just doesn’t make sense for the size of the business,” Okamoto said. “We would rather just have people go to our site than TikTok Shop.”

The new mandate has prompted some sellers to reconsider whether TikTok Shop still makes sense for their businesses, according to five brands and three consultants collectively advising hundreds of TikTok Shop sellers. Some merchants say they are planning to scale back their presence on TikTok Shop by reducing the number of products they sell, pulling back on promotions and exiting the marketplace altogether.

The planned pullback, which hasn’t been previously reported, underscores that TikTok Shop is still facing turbulence even as the threat of a U.S. ban has receded; TikTok finalized a joint venture handing parts of its U.S. business to a consortium that includes Oracle and investment firms Silver Lake and MGX. Early signs of strain have already emerged; users experienced technical issues over the weekend, according to Digiday. All told, regulatory uncertainty may not be the only hurdle TikTok faces in its quest to win over U.S. brands, especially bigger ones.

TikTok Shop has said the changes are intended to improve delivery reliability and order tracking, and to create a more consistent experience for shoppers. The company did not provide an on-the-record statement for this story.

‘It will be a roadblock’

TikTok has spent the past year trying to make its shopping platform more appealing to larger, more established brands. Big-name companies like Samsung, Ralph Lauren and Disney, that once shied away from selling on the nascent marketplace, all joined TikTok Shop in 2025. The influx of bigger companies on TikTok Shop has raised average unit prices across the platform and helped boost its revenues in 2025, Modern Retail previously reported. TikTok also launched a new program called Project Horizon that incentivizes agencies to onboard dozens of large brands driving at least $10 million in annual sales on competing platforms, an executive at one of the participating firms told Modern Retail on the condition of anonymity. The details of Project Horizon were first reported by The Information.

But TikTok Shop’s new fulfillment mandate risks alienating the big-name brands it’s trying to recruit.

Travis Johnson, the global CEO of Amazon marketing agency Podean, which works with 200 brands, including Mattel, Danone and Wella, said one client that drives hundreds of millions of dollars selling wholesale through Amazon had been looking to join TikTok Shop — but the shipping change has stalled their decision. The company doesn’t have any retail-level DTC logistics, so “FBT is not an option for them,” Johnson said. The brand “is exploring Amazon Multi-Channel Fulfillment,” he added, which is still permitted “in compliance with TikTok Shop policies,” according to TikTok’s website. But specific requirements remain unclear. “Detailed requirements will be provided later, so sellers should stay updated for further instructions,” TikTok’s website says. In the meantime, Johnson said “nobody is making any sudden decisions.”

The executive at one of the agencies participating in TikTok’s Project Horizon initiative said the shipping change will make it harder to recruit enterprise clients. The agency is tasked with recruiting at least 30 large brands to sell on TikTok Shop. Agencies stand to earn a share of sales if the brands they bring onto TikTok Shop collectively generate $50 million in revenue on the platform by the end of the year, the executive said.

“It will be a roadblock,” the person said. “If your priority is to onboard brands, you should give brands enough flexibility to choose whatever they can do.” Large brands, the person added, “want to look at all the options, they want to make their own decisions around logistics.”

Katya Constantine, the CEO of ad agency DigishopGirl Media, said the timeline and cost implications of the shift are already causing some brands to hesitate. “This is a pretty big change,” she said, adding that migrating fulfillment systems and integrations “takes more than 30 days,” the deadline TikTok has set. Constantine said the fulfillment shift introduces new complexity that some brands aren’t prepared to absorb, particularly on short notice. “Not everyone is going to be able to adapt,” she said.

Another agency executive said a top client is outright refusing to change its fulfillment process under the new policy because it would increase costs and force teams to learn a new fulfillment process.

TikTok’s fulfillment growing pains

Part of the issue is that multiple brands and consultants told Modern Retail that FBT still has operational kinks to work out. One brand executive, who requested anonymity because they’re not authorized to speak publicly on the matter, said TikTok’s logistics services are “newer” and “not running with the same level of excellence” as Amazon’s own fulfillment program, which the person described as “a well-oiled machine.”

The executive piloted FBT in 2025 with their top-selling product. But when the product was sent to FBT warehouses, TikTok shipped out entire case packs of three as individual orders, rather than breaking them down into single units as intended. This mistake persisted for about a month. During this period, the executive said the company incurred losses of a six-figure sum due to the error.

One of the agency executive’s clients encountered similar logistical problems during the peak holiday shopping season when they opted into FBT. Although orders fulfilled using FBT are supposed to receive a “Free 3-Day Delivery” tag, many of the orders were severely delayed, with shipments stuck for weeks, the executive said. Customers, frustrated by these delays, repeatedly canceled orders and left negative reviews. When the brand reached out to get support or compensation from TikTok, the issues were blamed on third-party logistics partners, like USPS. The executive, who has around 30 clients, said only one of their major brands uses FBT, and the rest fulfill their own orders.

Another challenge with FBT is that the inventory can only be used for TikTok, so brands have to be careful with how much product they allocate. This can be extremely difficult given the viral nature of the platform, where sales for a product can surge at any moment.

“During viral peaks, having Seller Shipping as a fallback has been crucial,” said Jimmy Hadden, who recently led social commerce at Wyze. “We’re fortunate enough to be able to cover most of our baseline demand with FBT, but this change means that, during a viral spike, we’re likely going to be out of stock and miss realizing the peak significantly more often.”

Podean’s Johnson said the sudden switch to TikTok’s logistics services could be “overwhelming” for the company’s systems. TikTok Shop operates nine warehouses around the country for sellers. That’s a far cry from the 150 U.S. fulfillment centers that Amazon counts as part of its global logistics network.

“If FBT was the best solution in terms of both servicing capabilities and costs, more brands would use it,” Johnson said. One-third of Podean’s client base uses FBT, while the rest fulfill TikTok Shop orders themselves. He said that one of the reasons brands, including enterprise firms, choose to fulfill their own orders boils down to cost. “It is, by definition, going to cost you more as a business,” he said.

Fewer discounts, fewer products

If Okamoto’s experience is any indication, TikTok Shop’s new shipping policy could raise the bar for smaller merchants trying to grow on the platform. That would be a big change for a company known for propelling scrappy brands into the spotlight overnight. TikTok says more than 170,000 local and small businesses sell through Shop.

Brands that spoke to Modern Retail for this story said the shipping change is already having an impact on what products they’ll choose to sell and discount on TikTok Shop moving forward. The issue comes down to margins. TikTok Shop’s logistics fees for storage, handling and shipping can be higher than the fulfillment methods they currently use. FBT inventory can only be used for TikTok Shop orders; many brands currently fulfill TikTok Shop orders with their own warehouses using the same inventory pool that serves DTC and other retail channels, allowing them to stock most cost-effectively. TikTok’s fulfillment fees would also stack on top of already heavy discount expectations.

Okamoto said that in addition to pulling Matching off of TikTok Shop, she’ll likely reduce August’s offerings on TikTok Shop because of the added margin pressure associated with the fulfillment costs of using FBT.

“We’ll rethink what SKUs are available, how many different offerings we have and how much bundling we want to lean into,” she said. “If we’re doing new merch or new product launches, are those going to launch on TikTok Shop first? Probably not.”

Jerry Wu, the CMO of Grande Cosmetics, also said he expects the brand to narrow what it lists on TikTok Shop to be “more selective,” citing warehouse and shelf constraints. Currently, the brand lists its entire product catalog on TikTok Shop. He added that the brand will likely hold off on subsidizing steep discounts and promotions “because then we’re adding in a lot more carrying costs, and then we also have a heavy marketing cost on that platform, too.”

Similarly, lash brand FlutterHabit has avoided using FBT because the warehouse and service fees would mean it couldn’t offer the deep discounts TikTok consumers expect, according to the company’s director of marketing, Kate Soueid. A widespread shift to FBT could have a major impact on TikTok Shop’s customer experience.

“It’s going to be the customer who takes the hit at the end of the day, because they’re not going to be able to get those discounts they’re used to,” she said. “The brand is not going to be able to self-fund that.”