Will Facebook Marketplace Be the Next Ecommerce Heavyweight? When new platforms such as Facebook Marketplace open for business, you need to capitalize on your first-mover advantage. Facebook will reward you.
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Circumstances dictate actions, right? Well, that's especially true in the ecommerce field. By most standards, ecommerce is a young industry. but as the option goes deeper into its 40s in 2017, the slightest hint of an unfamiliar hue turns the dye a completely different color.
The reference is to the Indian marketplace. That country's emergence in the ecommerce marketplace has it set to overtake the United States in less than two decades, with "digital" sales expected to reach $63.7 billion by 2020.
This offers American ecommerce companies a big opportunity to start exploring more international waters. Amazon has already dipped its toe in -- and a big toe, at that -- by investing another $3 billion on top of the $2 billion it's already spent on its Indian unit.
Enter Facebook Marketplace, described at its October launch as "a convenient destination to discover, buy and sell items." With Facebook Marketplace, the potential for independents to take more sales activities overseas and grab a chunk of that potential business grows exponentially. So far, this new functionality is available only in the United States, U.K., Australia and New Zealand, but it could roll out globally if interest catches on.
Facebook's edge over competitors
If you're unfamiliar with Marketplace, you're far from alone. It's a relatively new feature on the Facebook app, working somewhat similarly to Craigslist with one exception -- you can actually see who is selling the product.
Anything you buy has the potential to be connected by eight degrees of social media separation. Buying something from a friend of a friend adds a certain level of trust, which isn't often present on the likes of Craigslist or eBay. In short, Facebook Marketplace doesn't feel like such a gamble.
You'll also enjoy the added functionality of Messenger. When you want to learn more about an item or haggle over price, Marketplace connects you right to Facebook's texting app. No need to hop on your email and wait for a reply.
Does this spell the end for other ecommerce platforms?
Not likely. It's difficult to change user behavior from social media to shopping. Though plenty of people already participate in buy-and-sell groups on Facebook, people don't often head to this platform on the hunt for a 1970s toaster oven -- they hit up eBay for that.
If you're an ecommerce startup, consider creating a Shopify store and hosting your products on your Facebook page. Unlike other social media platforms, Facebook offers the ability to buy products directly from a fan page. Using a platform such as Shopify allows you to sell products not only on your site, but on other channels, such as Facebook fan pages.
Catching the ever-moving target
Currently, Marketplace is open only to individuals, which may require startups and ecommerce entrepreneurs to adjust their businesses in order to stay competitive. The following should help you out:
1. Mix up your marketing strategy. Dominating one channel is all well and good but leaves gaps in your marketing efforts and opens your business to risk. When you take an omnichannel approach, you can navigate those peaks and valleys and reallocate funds to the areas most in need. In fact, engaging customers across multiple channels can increase your revenue by 9.5 percent while decreasing your year-over-year cost per contact by 7.5 percent.
2. Strengthen your fulfillment efforts. Consumers no longer value shipping. If it costs a dime and takes more than two days to arrive, they're left feeling underwhelmed -- and may just go with another retailer. Evidence? Some 28 percent of consumers abandon their shopping carts when charged an unexpected shipping rate.
Because shipping hard goods can be expensive, you'll often need to bake shipping into the cost, or change what you charge for shipping. Conduct A/B testing to compare which fulfillment method resonates best with your customers, yet still works for your business.
3. Look into third-party logistics. Ask yourself, "What type of business am I trying to create?" If the answer involves logistics, retain in-house shipping. Otherwise, look at using a fulfillment company to handle shipping. You'll likely save money, reduce liability and free up time to focus on growing your business.
Relying on a third party to ship goods will also allow you to automate your supply chain, from production to distribution. For a startup, that means you can conduct business with very little overhead. You can literally start manufacturing and shipping goods on demand.
4. Let go. As your business grows, you need to learn that no one can do it all. Let go of certain aspects of your business, such as accounting, customer services, graphic design or shipping and logistics. Upwork and similar sites can find people to help. But don't hand over the reins completely. Set expectations for your contractors, and track their progress with measurable results.
When new platforms such as Marketplace come out, you need to capitalize on your first-mover advantage -- Facebook will inevitably reward vendors like you for using it by increasing your exposure.
Until the company opens up Marketplace to businesses, make a slight adjustment to your strategies to stay competitive.