TikTok has created viral dances and instant stars, but it's also helping small businesses cash in. Here's how 4 of them successfully leveraged the unique algorithm.

• TikTok rose to popularity during the pandemic, launching influencers and brands into the spotlight.
• It also allowed small businesses to grow their brand at an unprecedented pace with viral videos.
• Insider spoke with four businesses about the benefits, and drawbacks, of unexpected viral fame.

Kim said the constant rejection made him and his partner nervous that they had missed their window of opportunity by selling the summer beverage in late fall. That's when they decided to hop on TikTok, which was surging in popularity amid the pandemic.

"First I put together a video, basically just chronicling our journey of how we got our first box and just to see whether or not anybody would be interested in the drink," Kim said, noting that he added a phone number that viewers could text to show interest.

"I posted the video in early November and it did OK, got like 30,000 views, and we're, like, 'Right, you know, a hundred more of these videos and we'll be the biggest brand ever.'"

The video showed Nectar in production - the cans of hard seltzer being filled, sealed, and boxed - superimposed with captions detailing the time it took to bring the product to fruition. Kim said they put a lot of effort into their videos regardless of whether they go viral: "Shooters keep shooting."

A few weeks later, on Black Friday, Kim said that he got a notification that TikTok took down their biggest video for breaking community guidelines. A spokesperson for TikTok told Insider that Nectar's video was flagged by the algorithm for sharing personally identifiable information by adding the phone number in the caption.

"I quickly reposted it, and I texted everybody in our group chat, 'Dude, they took down our biggest video,"' he said, adding he was "freaked out" by the move.

Much to his surprise, the views on the reposted video grew tenfold. Three days later, Kim said the video had more than 300,000 views, and "hundreds and hundreds and hundreds of people across the entire United States" texted the phone number to express interest. As of Thursday, the video had 415,000 views.

The duo took the videos and hundreds of phone numbers to two mom-and-pop liquor stores in Los Angeles. They put 150 boxes on the shelves at each location and sent out a text to those who texted the phone number from their viral video to let them know that the seltzer was available for the first time to customers.

When they arrived at the stores the next morning, Kim said it was "pandemonium," and Nectar sold out in under an hour. "I will always remember this day for the rest of my life," he said. Since then, the popularity has only grown, with other viral videos gaining 500,000 views each. The company's TikTok had 39,000 followers in seven months.

Nectar ended up hosting more pop-up events and gaining more traction on TikTok before eventually distributing their product with alcohol retailer BevMo and delivery startup GoPuff, which acquired BevMo in November of last year.

The company also made it known to their followers that they would take their product to any city that gets 300 people to text the company phone number and recently sold more than 300 boxes of Nectar in Seattle.

"Seven months ago, we had zero customers and followers," Kim said. "Today we are in 100 stores self-distributed across California. We ship direct across the entire state of New York. We did this with no distributor, no publicist, no marketing budget."

Nectar wasn't the only small business that leveraged the growing popularity of Tiktok and the platform's algorithm to launch their success. The popular video-based app has joined the ranks of other social-media platforms like Facebook and Instagram to help businesses build their brand and get their name out there.

Digital marketing isn't new, but TikTok's been a game-changer for small businesses

"You see like the big players on there - Nike, Coca-Cola - and then you see small businesses that have a fraction of the budget, but are actually doing way better on social," Ross said. "And that's like one of the very, I think, unique things about [digital marketing]. That really doesn't happen in any other area of marketing."

But what sets TikTok apart from social platforms like Instagram and Facebook, however, is the video app's unique ability to make videos go viral. Ross said the biggest draw to TikTok are the fluctuations in video traffic, even if you have a smaller base of followers.

"You're not going to see those big fluctuations on Instagram where, like, one post gets a million views and the other gets 200," she said. "That ability to go super-viral and not have it be dependent on your follower count is very unique to TikTok, and it provides, I think, a huge opportunity for a small business who doesn't have a ton of followers, who doesn't have all those resources."

Small businesses can use TikTok's interest-based algorithm to get their product in front of the right demographic, Ross said. Whether it is viewers who are looking to buy a specific item or are simply coming across merchandise representing their existing obsessions, the algorithm identifies the viewers' interests and puts specific videos into their news feed, known as a "For You Page."

"I mean, you can have 200 followers on TikTok and have a video go viral, and it gets a million views and it completely changes everything for you," Ross added.

"It's really all about showing people what they want to see," she said. "So Instagram is all about connecting you with your friends, with people that you know, and you have to be able to find those people and follow them ... TikTok is just about what you like."

That facet of the TikTok algorithm lent itself to the business concept behind Nice Shirt. Thanks!, a custom-clothing company, and helped build its following.

Hayden Rankin and Mason Manning brainstormed the idea of their comedic apparel company in October of last year because the pair "wanted to be able to monetize art and comedy." Customers send in a prompt of what they want on their shirt, and artists contracted with the company design the shirt without the customers' knowledge of what it could be.

"We had a few ideas, like, 'Oh, maybe the customer could create their idea,' or 'Oh, maybe we could design something,' and then, sure enough, it just came to this idea," Rankin said. "Our interpretation is going to be put down on what the customer wants onto a shirt, and we're going to keep it as a surprise until the customer gets it."

"This is a market that we don't really think exists quite yet," he added.

Prompts from customers could range anywhere from designs featuring their favorite musicians and pop-culture fandom to suggestions such as "I like hedgehogs, but I also have borderline personality disorder."

Their business concept lends itself to social media: Their product is the result of a conversation with consumers. While they do have 27,000 followers on Instagram - where some customers can post their order on their Story - and an even smaller audience on Twitter, Rankin said their TikTok account, which has 230,000 followers, reaches the most people, especially with the potential of their customers' videos going viral alongside their own.

The next logical step after giving customers a surprise design on a T-shirt was getting the reaction, which customers are asked to post on TikTok with the hashtag #niceshirtthanks. The hashtag has nearly 50 million views.

Rankin said they noticed their growing popularity early, prompting them to caps the number of shirts they could sell in one day. "Because of the nature of the business - each shirt is individualized - we can't mass-produce a ton of one design," he said. "We found that we're going to have to limit the number of orders because we don't know how many we can produce quite yet."

He added that as the company grows, the pair hopes to increase the number of allowed sales and continue working full time on expanding the brand and the appeal of comedic apparel.

Going viral on TikTok persuaded some small business owners to turn their side gig into a full-time venture

Brianna said she initially intended on casually running the business on the side until graduation, and she said she was only advertising products on Instagram, which mainly friends and family followed. About a month into creating Fabulyss, she decided to make TikTok videos for fun.

"And then one day, one of my TikTok videos blew up, got millions of views," Brianna, who has 1.3 million followers on TikTok, said. "And ever since then, I've been selling out consistently since November because of TikTok."

Brianna has since expanded her business to an office space in February and has two family members working for her. She said she hopes to get a warehouse for her products within the next year and do pop-up shops to meet her customers in person - a vision that would not have been made possible if she had not gone viral on TikTok.

"Because of, like, the algorithm, it changed my entire future. I actually didn't want this as a full-time thing," Brianna said. "I thought once I graduate, I'll just stop it, but it showed me that I can just be my own boss and do what I want."

She added: "So if it wasn't for TikTok, I would just be working a regular 9-to-5 job like everybody else does, but instead I get to do what I want and on my own time."

Going viral can put big pressure on a small business

Marielle receives photos of her customers' pets to turn into line-art drawings she designs herself. From there, the designs are engraved onto jewelry pendants to create personalized accessories for her customers, a process that takes a few weeks. Marielle posts videos of her design process on her business' TikTok account, which has nearly 412,000 followers.

In one of her first viral videos, which has 9 million views, she talked about a customer stealing from her business by complaining about the necklace and refusing to return the product after Marielle granted her a refund.

"It generated a lot of sales that I couldn't really handle," Marielle said. "I mean, I didn't think about stopping my store. So I just took all of the orders, thinking that I could draw everything in one week and then ship them out the next week, but that wasn't humanly possible."

Though Marielle scrambled to keep up with the new demand as a result of her viral videos, she said her customers started to complain and send angry messages, and some even posted publicly accusing her of scamming them.

Ali Mirza, a digital-marketing strategist and founder of #iSocialYou, said he has seen small-business owners and entrepreneurs getting overwhelmed by a lot of sudden attention from social media. Mirza told Insider that businesses can safeguard themselves from those situations by setting the right expectation and capturing customers' contact information to notify them of a restock if they order when inventory is sold out.

He also advised owners and entrepreneurs that find themselves in that situation to remember that social media is "just one piece of your whole business. It's not the business."

"My perspective is, we want to use social media to build our business - we don't want to be used by social media," Mirza said. "I want to use social media to bring traffic to me, but then I have other aspects of my business to really capture that traffic and use it to my benefit."

Since going viral, Marielle said she brought on her friend to help with customer service and her uncle to help with the pet pendant engravings, and she said the positive reactions from her customers receiving such a personal product gives her "so much drive to wake up every day and do something for my small business."

"Seeing the reactions of my customers made me feel so happy and content inside because, you know, I feel like I created that," Marielle said. "I drew their dog, and seeing them really happy and just cherish the jewelry is really what motivated me to keep going and do it every day. And ever since I think I didn't have a free day for like six months, and it was so much fun."