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by Dana George | Published on June 14, 2022
Image source: Getty Images
There's no doubt that it takes perseverance to make it big on TikTok.
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It’s clear that some people earn money by posting videos to TikTok, but how’s it done, and how much do those lucky few make?
While we can’t verify annual incomes, Addison Rae — who rose to fame by dancing on TikTok — reportedly earns in the neighborhood of $5 million annually. Sisters Charli and Dixie D’Amelio are not far behind, with incomes estimated to be $4 million and $2.9 million, respectively. Like Addison Rae, the sisters grew a fan base by posting dance videos.
So, how do they do it, these new social media stars?
When you only have between 15 seconds and three minutes to make a name for yourself, it’s amazing that anyone has managed to become rich and famous. The first goal for many TikTok creators is to join the TikTok Creator Fund. This is the pool of money from which TikTok pays creators. To participate, a creator must:
To give you a sense of how long the average creator might take to earn money through the TikTok Creator Fund, every 1,000 views makes the creator between $0.02 and $0.04. That means a creator with a video viewed 1 million times can expect an extra $20 to $40 in the bank.
Those making millions are doing more. Here are three other ways the big names have become big names:
Like all social media, TikTok is about making money, and everyone wants a piece of the action. Businesses want to harness the popularity of a creator to get more eyes on their products. For example, if a creator with millions of followers stops what they’re doing to talk about the new tennis shoes they’re wearing or to extol the virtues of an auto insurer it’s because they’re being paid to do so.
That’s not to say that viewers are unaware that it’s an advertisement. TikTok insists that creators enable their branded content toggle when posting paid ads. The toggle adds a disclosure to the post description, making viewers aware that they’re about to see an advert. TikTok will remove such a video if the disclosure is not included.
Still, when a creator becomes popular enough, viewers will watch anything they produce, including commercials. And according to Hootsuite, a big-name creator with a large audience can earn up to $80,000 through brand partnerships.
Let’s say a chef creates a new brand of pots and pans. If that chef has enough regular TikTok followers, they have ready-made customers. By encouraging followers to purchase the line of cookware, they can grow the brand.
And sometimes, the merchandise sold is a way for TikTok viewers to tell the world about their favorite creators. They might wear a t-shirt or carry a tote with the face or name of a creator printed on it. It may not be the same thing as a brokerage investment, but creating merchandise for followers to buy is an investment of sorts. It's all about getting their name out there.
TikTok creators look for ways to extend their reach through merchandising, and that merchandise can bring in big dollars.
Some creators seek to partner with trendy, well-liked media personalities to help raise their visibility. For example, if a TikTok creator builds an audience by sharing fitness videos, they might reach out to a more famous fitness influencer on Instagram. Suppose that person agrees to partner on a video or series of videos. In that case, the TikTok creator may be able to impress the influencer’s followers to become one of their followers as well.
Of course, both parties must gain something from the deal. For example, the TikTok creator might pay the influencer or promise to promote their new fitness book in a specified number of videos.
Making it big on TikTok takes ingenuity and drive, but creators with both can strike it rich.
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Dana has been writing about personal finance for more than 20 years, specializing in loans, debt management, investments, and business.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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