What Is Facebook E-Commerce?

Is Facebook e-commerce just people reselling unwanted items through Facebook Marketplace or is there a place for small businesses as well? In 2020, Facebook’s founder, Mark Zuckerberg, announced Facebook Shops, an e-commerce addition to the Facebook brand. Now that you are considering starting your own e-commerce business, you are probably wondering what Facebook e-commerce is and if it is right for you. In this article you will learn the answer to the question, “What is Facebook e-commerce,”  what advantages people see running their shops on Facebook, a Facebook business overview, and how you should decide which e-commerce platform is ultimately best for your business.

shops on facebook

Facebook E-Commerce

While Facebook e-commerce has always let users list products, Facebook Shops allows the user to upload their entire catalog to both Facebook and Instagram. The process is much faster and much easier. 

Facebook Marketplace

It is important to note that Facebook Shops is not the same as Facebook Marketplace. Facebook Marketplace was one of Facebook’s first forays into the e-commerce world. In the past, it was only used for peer-to-peer transactions. For example, if you had an old boat you wanted to sell, you could list it on Marketplace for buyers to consider. Nowadays, Facebook Marketplace has expanded to include retailers and small businesses. Marketplace is not really a fully-fledged e-commerce platform. You can not make transactions through Facebook Marketplace. When you want to purchase something off of Facebook Marketplace, you will be redirected to the business’s official site or you and the user will need to discuss how payment will be exchanged. 

Facebook Marketplace is more akin to Craiglist than a true e-commerce site. It showcases products over your brand. If you want to grow your business as a whole rather than just sell a specific product, Facebook Marketplace will not be for you. This is not to say that Marketplace will not work for some businesses. Marketplace can allow you to offer your customers a highly personalized experience, but unless you have a specific reason to use Marketplace over Shops, Shops is the way to go for businesses.

Facebook Shops

Facebook Shops on the other hand is an e-commerce platform. Businesses can carve out an identity on the platform. You can customize your page with branding and communicate with customers as a brand rather than a product. To make a sale, the customer never has to leave Facebook, but you can also redirect to an external website as well. You can list your entire product catalog and have it posted not only on Facebook but also other Meta-owned platforms like Instagram. A business selling through Facebook Shops can utilize tools to track target customer habits and launch informed marketing campaigns. Facebook Shops is the best answer to the question, “What is Facebook e-commerce?”

facebook e-commerce

Audience

There is no doubt that Facebook has a large user base, almost 3 billion as of 2022. Your desired audience is likely nuzzled somewhere in those 3 billion active users, you just need to find them. Luckily, Facebook e-commerce has tools to help you with this process. We will go more into detail on these tools in the advertisements section of this article.  

Advertisements

While uploading your catalog to Facebook Shops is free, advertisements are not. Facebook is known as one of the best social media platforms to advertise. Creating a Facebook Shop in conjunction with Facebook advertisements can be very effective. Clicking an ad will lead them to your Facebook Shop, meaning that they will stay on the same website. 

Facebook advertisements can make your Facebook e-commerce shop boom. Facebook Dynamic Ads will show up for people who have already expressed interest in your brand. They will show up-to-date products and pricing to match the wants and needs of your customers at the right time so you can make more sales. Shopping Custom Audiences is another way Facebook helps you reach customers ready to make a purchase. They will also identify lookalike audiences so you can connect with new shoppers. 

Another tool is the Meta Pixel, formerly known as the Facebook Pixel. It makes it easier to measure the effectiveness of your advertising efforts. This function will help you reach the people who are most likely to take a desired action, such as making a purchase, from your shop. While this tool has lost some power in recent years due to privacy updates in iOS 14 that allow users to opt out of tracking and Google’s plan to stop third-party tracking, it is still a useful tool. Facebook’s tracking is considered a first-party cookie so its tracking will not be affected as it collects its own data. The data Facebook collects helps your business find its audience and make more sales. 

Transactions

The way transactions are performed for shops on Facebook will differ depending on where you live. Facebook Checkout is only available in the United States. If you live anywhere else, transactions will need to be performed through another website. You can redirect your customers to your outside e-commerce site to complete the transaction in the case you are outside the United States.

For those who live in the United States and choose to use Facebook Checkout, your customers can make purchases directly through Facebook or Instagram without ever leaving the site. Facebook Checkout also gives your customers the option to securely save their checkout information for faster future transactions. Customers can also be assured that every purchase made through Facebook is quality and accurate to what they are getting as Facebook checks each listing. This adds credibility to your e-commerce store. 

On the downside, Facebook Checkout collects a portion of each transaction. This is not an uncommon practice among other e-commerce platforms though. For Facebook Checkout, the fee is 5% per shipment or $0.40 per shipment under $8. After this deduction, your profits will be sent to you within 30 days. 

facebook business overview

Shops on Facebook

Now that you know how to answer, “what is Facebook e-commerce,” we can get into how to actually create your shop on Facebook. To begin, you will need to sign up for an advertising account through Facebook Business Manager. After setting up your account, it is a good idea to set up a Meta Pixel. Although the Meta Pixel is meant to measure the effectiveness of an ad campaign, it can also collect information on your audience before launching a campaign that you can use in the future. 

You should customize your shop on Facebook to reflect your brand. Facebook Shops have many fonts and colors to help you create a cohesive and visually appealing Facebook e-commerce shop. You should feature your best products so your customers can find them easily. 

As with all businesses, you need to stay in contact with your customers. Because your shop is on Facebook, you will have access to Facebook’s messaging services to better communicate with your customers. Use WhatsApp, Facebook Messenger, and Instagram Direct to answer customer questions and deal with customer support issues as they arise. 

Facebook Business Overview

If you choose not to use Facebook as your main e-commerce platform, Facebook still offers many options to help you grow your business. A quick Facebook business overview will make it clear that you need to use Facebook to advertise your business.

If you are still doubting the power of Facebook, you should know that 78% of consumers made purchases through discoveries on Facebook, 15% of users actively shop on Facebook, and 93% of businesses are active on Facebook. You can reach over 2 billion people using Facebook Ads. While ROI will depend on your industry and other factors, on average, businesses earn two dollars for every dollar spent on facebook advertising.

Facebook Business Manager can help you take advantage of Facebook’s benefits. Business Manager allows you to easily give permissions to the people who need them and see what your employees are working on. It is a secure way to manage your advertising accounts and business profile. Business Manager is the best way to keep track of all your Facebook business endeavors. 

What is facebook e-commerce

Is Facebook the E-Commerce Platform for You?

Facebook has been a go-to social media platform for advertising for years. With the introduction of Facebook Shops, small businesses have had some decisions to make. Now that you know the answer to the question, “what is Facebook e-commerce,” you can decide whether or not the platform will work best for you. If you already use a different e-commerce platform, should you move to Facebook? Do you make a Facebook shop and keep your current site? If you are just starting, which should you choose? 

The e-commerce industry is large and the decision might feel overwhelming. Choose a platform that fits your resources. If you are going to be designing it yourself, choose a platform that you can confidently make look both aesthetically beautiful and easy to navigate. Not all platforms take the same transaction fees. Facebook Shops transaction fees sit at 5% or $0.40 depending on the size of the order. Some platforms will have larger and smaller fees. Different platforms have different benefits and corresponding prices. Facebook is free, while other e-commerce platforms are not. Do your research to find the e-commerce platform that will help your business reach its goals. Even if you choose not to go with Facebook, be sure to still take advantage of Facebook’s advertising options to reach a larger audience.

FAQ:

  • Is Facebook Marketplace considered e-commerce?
  • Should I use Facebook for e-commerce?
  • How does Facebook help businesses reach their target audience?
  • What is the difference between Facebook Shops and Facebook Marketplace?
  • Why is Facebook advertising so effective?

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