Disclosure: the law, the toggle, and the habit

Start with the law, because it predates the app. In the US, the FTC requires that when you have a financial relationship with a seller — and earning commission on sales is exactly that — you clearly disclose it where viewers will see it, in a way a reasonable person can't miss. “Clearly” is doing heavy lifting: a disclosure buried under thirty hashtags, written as #thanks, or delivered only as a verbal mumble at minute four does not meet the standard. The disclosure has to be hard to miss and easy to understand: #ad (or plain words like “I earn a commission on this”) in the description, up front, plus saying it on camera in the video itself for good measure.

TikTok adds its own layer on top of the law: the commercial content disclosure — the toggle and product-link labeling built into the posting flow. Use both, every time: the platform's toggle switched on for branded/commissioned content, and your own plain disclosure in the caption and voice. They are not alternatives. One satisfies TikTok's system; the other satisfies the FTC and, frankly, the viewer's right to know the person recommending the kettle profits from the kettle.

Does disclosure hurt sales? It's the most-asked question in this module's territory, and the evidence creators actually live with says no — viewers are thoroughly fluent in creator economics by now, and an upfront “I earn a commission; here's why I still bought it with my own money first” reads as confidence. What hurts sales is the discovered non-disclosure: the comment thread announcing you hid the relationship converts your whole catalog into evidence. Disclosure is not a tax on trust. It's a deposit.

Make it muscle memory with a fixed order of operations on every post: film, edit, then before posting — toggle on, caption written with the disclosure in the first line, pinned comment planned. If a seller ever asks you to skip or soften the disclosure, that's not a business opportunity; that's a seller asking you to hold their liability, and Module 9 will teach you the sentence that ends that conversation professionally.

Claims you can never make

The claims rules compress into one principle: you may demonstrate what a product does; you may not promise what it will do for the viewer — and the gap between those two is where violations live. Demonstrated: “this organizer took my drawer from this to this,” on camera. Promised: “this will fix your whole kitchen.” Demonstrated: “here's the battery test I ran, it lasted four hours.” Promised: “the longest battery life of any vacuum, guaranteed.” Superlative claims (“best,” “#1,” “cheapest anywhere”) require proof you don't have; skip them structurally, not case by case.

Health is the hardest line. Supplements, skincare, wellness devices: you can describe a product's intended use and your own genuine experience in careful, ordinary language, and that's the ceiling. Diagnosing viewers (“if your back hurts, you need this”), claiming treatment or cure, inventing timelines (“clearer skin in seven days”), and before/after imagery implying guaranteed results are the claims that get creators' e-commerce permissions revoked and, in real cases, regulators interested. If a seller's brief hands you claim language, the brief does not outrank the policy — you are the publisher of every word you say.

Earnings claims cut the other way and matter for your own content about this business: if you ever post your results, post them truthfully and completely (timeframe, context), never as a promise of what viewers will make. And price claims: “lowest price,” fake comparisons to inflated “original” prices, and invented sale deadlines are the everyday deceptions the platform scans for. The listing shows a price; your job is to read it honestly, not to improve it.

A working test for any sentence you're about to say on camera: could the product's own lawyer say this in an ad without flinching, and can my video itself prove it? If either answer is no, cut the sentence and demo harder. Your footage is your evidence locker; claims that outrun the footage are unsecured debt.

Your health rating and the violations ladder

TikTok scores your selling conduct through the Creator Health Rating — think of it as the credit score of your selling license. Rule-following content and clean selling build it; violations draw it down, and thresholds along the way unlock or lock features: the pilot's early exit runs partly on health points, while a rating in the basement ends with e-commerce permissions restricted or revoked outright. The rating is why Module 2 said your record is an asset: every clean post is a small deposit in the only account that lets you keep withdrawing.

Violations generally climb a ladder: a piece of content gets flagged or removed, points come off, repeat or serious offenses restrict features (fewer shoppable posts, LIVE limits, sample access), and persistent or severe abuse — deceptive claims at scale, repeated disclosure failures, off-platform diversion schemes — closes the account's selling privileges. Two properties of the ladder matter strategically. First, it's cumulative: small sloppinesses stack into big consequences, so “it's just one video” is never the right frame. Second, it's asymmetric: points are slow to earn and fast to lose, exactly like the trust it measures.

Appeals exist, and sometimes flags are wrong — automated systems misread demonstrations, especially in health-adjacent categories. Appeal with evidence, calmly, inside the system: the video, the script if you had one, the listing you relied on. But build your workflow so appeals are rare: pre-check your own claims against Lesson 2's lawyer test, re-read seller briefs for smuggled language, and keep the disclosure checklist from Lesson 1 physically attached to your posting routine.

One more quiet killer: other people's content. Re-uploading another creator's product video with your link pasted on — a real cottage industry in the comments — is unoriginal-content and rights trouble stacked together, and it torches the account's standing fastest of all. Your face, your hands, your demos. The license is personal, and so is everything that protects it.

Taxes and records: the unglamorous license to keep going

Commission income is self-employment income, with everything that follows: it's taxable, nobody withholds from it, and in the US it generally arrives documented on a 1099 (when you cross the reporting threshold through a payment channel) whether or not a form shows up — the income is taxable either way. The two habits that separate adults from cautionary tales: a separate place for the money (even just a distinct bank account) and a set-aside rhythm — a fixed percentage of every payout moved to a tax holding spot the day it lands, so April never bills you for money you already spent. Many creators set aside roughly a fifth to a third depending on their situation; your number is a question for a tax professional, and getting one for an hour in your first earning year is among the highest-return purchases in this business.

Records that pay for themselves: your payout statements, a simple monthly log (posts, sales, commissions, clawbacks — Module 7's sheet already is one), receipts for products you bought for content (refundable-sample purchases, props, your filming light), and mileage or shipping where relevant. Deductible business expenses are real and ordinary for creators; they only count if they exist on paper. Keep records for years, not months — the standard advice is at least three years from filing, and storage is a folder, not a lifestyle.

Entity questions — LLC or not, S-corp elections, business licenses — are above this course's pay grade on purpose: the right answer depends on your state, your other income, and your earnings trajectory, and it costs little to get properly at the point your Shop income becomes material. What the course will say: don't let anyone sell you a formation package in week one, and don't ignore the question in year two. Sequence it with your earnings, and revisit at every tax season.

• Shop payouts land in a dedicated account, separate from daily spending
• A fixed tax percentage moves to a holding spot the day each payout lands
• Monthly log kept: posts, sales, commissions, and clawbacks
• Receipts saved for products, props, and gear bought for content
• One hour with a tax professional booked in my first earning year