In 2020, Facebook introduced Facebook Shops. This feature allows businesses to create online stores on the social media platform for free. Facebook describes it as a “mobile-first shopping experience.” It's intended to appeal to eCommerce companies looking to set up quickly, especially small businesses and startups. But is it the best option? In this post, we’ll break down the basics of the benefits and drawbacks so you can make an informed decision about your next steps.
First, let’s look at the social media shopping ecosystem. Is it worth selling through the social channels, considering the time and resources required? The data indicates yes. Social media shopping grown as consumers find it convenient and easy. By the end of last year, the industry was expected to generate $23.3 billion, a 20% jump from 2019.
Having seen the demand growing, Facebook wanted a role in social commerce. Facebook Shops was well underway before the pandemic, but considering the buying behavior changes caused by it, it’s even more relevant. COVID-19 turned shoppers to digital channels like never before, and no matter what happens next, many consumers will stay there.
So, the shoppers are there, but is a Facebook Shop a good business move? How does it work?
Essentially, Facebook shops is a straightforward eCommerce platform. It allows you to create product listings, curate collections, track orders, and communicate with customers via live chat through either WhatsApp or Facebook Messenger. You can customize a shop with colors, fonts, and other branding.
Your page becomes a virtual storefront and delivers a seamless experience for shoppers because they never have to leave Facebook to make a purchase. They can also make purchases on Instagram, WhatsApp, and Messenger.
There is no cost to set up a Facebook Shop. However, there are fees if you want customers to checkout within Facebook. You must use Checkout, which is Facebook's payment processing tool. Facebook collects 5% of the total order, or 40 cents if it's less than $8. The 5% fee seems relatively small but could be considerably higher than your merchant account processing fees for an eCommerce website that you own.
While the shop is free to set up, you may need to pay to get consumers to come to it. If you don't have a large organic following, you may need to buy ads to reach customers.
With Facebook shops, you are limited to customers who are using Facebook or Instagram. Also, because you don't own the platform, you're subject to any changes that Facebook makes. You're also at greater risk of getting negative comments from customers.
Another thing to consider is that you don't own the platform. This means you have little control over what happens moving forward. You're essentially borrowing space and the channel can change the rules at any time.
The benefit includes that buyers use Facebook to find products and brands, almost as much as they use Google to do so. You also can expand your reach by optimizing and nurturing your Facebook Shop. You can display your products with a shop link on your Facebook business page as well as your Instagram profile. You can also integrate the tagging of products in your posts. Further, your products will be discoverable via the Facebook shopping search tab.
However, you need to consider your objectives and sales projections. If you're looking to do high volume, will the Checkout fees chew up your profits? If you want to build a big customer base that you will have for the long-term, do you want to risk being forced to make changes to your shop?
Keep in mind that it doesn't have to be an either/or decision. A Facebook Shop could be used to augment your own site or to test a certain product line. It might be an easy way to get started before migrating to your own site.