Many believed that as more international brands entered TikTok Shop, the survival space for small and medium-sized sellers in the US would be further squeezed. However, the reality is quite the opposite.
The latest data from TikTok Shop shows that by 2025, US sellers with annual revenue below $15 million will see a 66% year-on-year increase in sales; currently, over 215,000 small businesses are actively operating on TikTok Shop in the US, a 25% year-on-year increase. This indicates that the US market for TikTok Shop is still in a phase of rapid growth, and the platform still offers significant opportunities for small and medium-sized sellers.
However, at the same time, more and more sellers are beginning to realize that TikTok Shop is no longer just a platform for "traffic generation." As order volume increases, issues such as after-sales service, returns, and fulfillment efficiency are becoming important variables affecting profits.
Why are TikTok Shop sellers increasingly vulnerable to having their profits dragged down by returns?
For many cross-border sellers newly entering the US market, the initial focus is on "how to increase volume." But once orders truly begin to grow, another problem often arises quickly—returns. This is especially true in popular TikTok Shop categories such as footwear, apparel, beauty, and home goods, which inherently have relatively high return rates.
The National Retail Federation's (NRF) "2025 Retail Returns Landscape" report projects a 19.3% return rate for online e-commerce in the US. This means that for every 100 orders sold by cross-border sellers, nearly 20 are likely to be returned.
If return processing efficiency is insufficient, a chain reaction of problems will quickly emerge, such as inventory buildup, increased after-sales costs, lower platform ratings, and reduced customer repurchase rates. This is especially true on platforms like TikTok Shop, which emphasize customer experience; return processing speed is increasingly impacting store performance.
For TikTok Shop sellers, return speed is more crucial than imagined.
Many sellers initially choose to return goods to their home country, but as order volume increases, the problems with this model become increasingly apparent.
First, the process is lengthy. From the time a US consumer initiates a return to the time the goods actually arrive in China, it often takes several weeks. During this period, the goods cannot be resold, significantly reducing inventory turnover efficiency.
Second, the cost is high. For low-value goods, international return shipping costs can even exceed the value of the goods themselves. Especially for apparel, many returns only involve minor packaging damage, wrinkles, or odors, not necessarily rendering the item unsellable. Direct destruction would result in significant losses.
Therefore, more and more TikTok Shop sellers are adopting a local US return processing model. This involves receiving, inspecting, and sorting the returned items locally in the US, then deciding on repackaging, resale, relabeling, or centralized return shipping based on the condition of the goods. Compared to the traditional model, the biggest advantage of local return warehouses is the ability to shorten the return cycle and increase product utilization.
US return warehouses are becoming standard for TikTok Shop sellers.
As competition in the US TikTok Shop market intensifies, return processing capabilities are increasingly becoming a fundamental operational skill for sellers. This is especially true for small and medium-sized sellers with limited profit margins; poor control of return losses can easily impact overall profitability.
For example, U-Speed currently has two major return warehouses in New Jersey (Eastern US) and Los Angeles (Western US). The East Coast return warehouse covers a total area of 7,250 square meters, with a daily processing capacity of over 20,000 items; the Los Angeles West Coast return warehouse also covers 7,250 square meters, with a daily processing capacity of over 10,000 items. Both warehouses are equipped with forklifts, light and heavy-duty shelving, fire monitoring, 24-hour security systems, and CCTV systems, capable of meeting the return processing needs of various types of goods.
Compared to simply "collecting and returning items," U-Speed emphasizes comprehensive post-return processing capabilities.
US return logistics time is controlled within 3-5 days; return quality inspection time is approximately 2 days; each returned item comes with 3 photos for quality inspection uploaded to the system; repackaging services are supported to help products meet resale requirements.
For footwear and apparel products with high return rates on TikTok Shop, U-Speed also provides customized services such as lint removal, simple cleaning, ironing, and odor removal to help sellers improve the utilization rate of returned goods.
In addition, U-Speed offers a comprehensive suite of US cross-border logistics services, including warehousing, dropshipping, and returns processing, helping sellers reduce the pressure of managing multiple suppliers and creating a complete logistics loop.
TikTok Shop Enters a Phase of "Refined Operations"
In the past, many sellers relied on traffic dividends to quickly generate orders, but now, the TikTok Shop US market is entering a more mature operational phase. The platform is increasingly prioritizing consumer experience, and consumers are paying more attention to logistics and after-sales efficiency.
Therefore, for cross-border sellers, those who can truly operate stably in the long term are not just sellers who "know how to attract traffic," but those who can truly streamline their fulfillment, after-sales, and return systems. Especially against the backdrop of continuously growing order volume, a stable and efficient local US return warehouse system is no longer just a "bonus," but a crucial support for long-term operation on TikTok Shop.
