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.

By Brent Freeman

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

xavierarnau | Getty Images

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.

Related: Where E-Commerce Is Booming. Hint: Think Outside the U.S. (Infographic)

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.

Related: Take Ecommerce to the Next Level With These 4 Marketing Strategies

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.

Related: 5 Shipping Trends for Small Ecommerce Businesses To Watch

Until the company opens up Marketplace to businesses, make a slight adjustment to your strategies to stay competitive.

Brent Freeman

Founder and President, Stealth Venture Labs

 Brent Freeman is the founder and president of Stealth Venture Labs, an early-stage venture lab based in Los Angeles and San Francisco that focuses on incubating and accelerating ecommerce businesses using operational expertise, data science, digital marketing systems and compelling business models. Brent is also an entrepreneur-in-residence at Crosscut Ventures, a venture capital firm based in Los Angeles, where he advises on customer acquisition, digital marketing and consumer internet investments.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Related Topics

Growing a Business

A Skin Cancer Scare Led Lois Robbins on an Entrepreneurial Journey. Here Are Her 3 Best Success Tips.

The actor and producer became an entrepreneur when she created a product she needed after skin cancer.

Business News

Warren Buffett's Annual Letter Reveals the Secrets and Lessons Behind $930 Billion Berkshire Hathaway

Buffett wrote about the company's unchanging investment rule and how his sister became "very rich."

Buying / Investing in Business

Here's Where Venture Capitalists Are Putting Their Money in 2024 — and What Startups Must Do to Attract Funding

Here are the top five industries and projects that are currently leading the market and the steps you need to take to attract investors effectively.


McDonald's Dives Into Anime Craze — And Flips Its Golden Arches— with WcDonald's Event

McDonald's celebrates anime culture with "WcDonalds," a unique, limited-time event featuring custom manga packaging and themed menu items.

Business Solutions

Create Spreadsheets, Email Clients, and More With Microsoft Office 2019, Now Only $29.97

Enhance your business's daily operations with a $30 license to Microsoft Office 2019.

Employee Experience & Recruiting

3 Tips to Hire Your Next A-Player

Learning how to hire A-players is a skill set that you can acquire. When you know how to attract and hire A-Players, it changes the trajectory of your business.