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Why The Facebook Marketplace Should Scare ECommerce Sites

In October of 2016, Facebook launched what it is calling its Marketplace, which enables Facebook users to browse, buy, and sell items with the people in their communities. As a result, it can be considered a competitor to e-commerce sites such as Amazon, eBay, Craigslist, among others, though it remains to be seen whether it will prove successful or not.

Why Should Facebook's Marketplace Scare E-Commerce Sites?

There are a number of reasons that Facebook's Marketplace should scare e-commerce sites such as eBay and Craigslist:

  • The more people who use such sites, the more popular that such sites become because of the increasing selection of items that can be found for sale, which makes it that much easier for shoppers to find whatever it is that they are looking for at a price that they are willing to accept. For reference, Facebook has 1.5 billion users. Furthermore, it has stated that more than 450 million of its users visit what are called buy and sell groups on a regular basis, meaning that Facebook has an enormous number of potential customers at its disposal.
  • On a related note, Marketplace is even more convenient because it has been incorporated into Facebook, meaning that interested individuals can access it with no more than a single click, thus increasing their chances of visiting it for their buying and selling needs rather than one of the other e-commercial sites out there. For that matter, buying and selling items on the site is not that much more difficult. After all, finding items for purchase is as simple as entering a search term before narrowing down the results with the use of prices, categories, and locations. Likewise, selling items can be done by snapping a picture of the item for sale, entering a name, a price, and a short description, and then posting the result to the site before waiting for the offers to come in.
  • With that said, the increased number of items for sale that can be found on Marketplace provides another benefit besides an increased chance of interested individuals finding what they were searching for. In brief, a lot of people like to browse through items even if they are not necessarily intent on buying something, which is what results in the phenomenon of window shopping in real life. However, the more that they browse through items of interest, the higher their chances of making a purchase either in the moment or sometime soon in the future, meaning that an increased selection of items for sale can actually make it easier for them to sell. Since Facebook has such an enormous user base, there is reason to believe that it will be able to create something similar to the experience of window shopping, thus benefiting itself as well as all of those who choose to make use of its Marketplace.
  • Finally, people who buy and sell on Marketplace can check out the profiles of the people that they are entering into transactions with, which sounds simple enough but is an enormous benefit. After all, Facebook profiles tend to contain a fair amount of information, so much so that people can feel reassured that the other person exists in real life rather than as nothing more than the creation of a scammer seeking to cheat someone else out of their money. As a result, people who choose to use Marketplace can have increased peace of mind from knowing that their counterparts are likelier to be legitimate buyers and sellers, which is a serious concern with other e-commercial sites where it is much easier for scammers to remain undetected until the damage has been done. In effect, this means Facebook's Marketplace could become trusted by shoppers within a short period of time, which could provide it with the boost that it needs to clear its initial hurdles.

With that said, it is important to note that there are also reasons to believe that the success of Facebook's Marketplace is far from being guaranteed:

  • Facebook has no involvement in the actual execution of the transaction between the buyer and seller. In brief, a transaction on Marketplace starts with the buyer expressing their interest in something. After which, the two start talking about a way to complete the transaction with very little involvement from Facebook. As a result, while the process is simple and straightforward, this also means that there are no protections for buyers and sellers, meaning that they could end up being unable to get compensation in case something goes wrong with the transaction. Something that could deter more cautious people from making use of Facebook's Marketplace rather than one of the other e-commerce sites out there.
  • Even though Facebook has an enormous user base, this doesn't change the fact that its Marketplace will be facing an uphill climb as it struggles to carve out a niche for itself. After all, its competitors are better-established, meaning that they have existing user bases with existing loyalties who might not be as easy to sway to a competitor as Facebook might want them to be. While Facebook can make up for this to some extent with the people who use its features on Facebook Groups, its Marketplace will still have to stand on its own if it is to succeed in the long run.

Final Thoughts

So far, Facebook's Marketplace has been launched in no more than a small selection of countries, which makes sense because it wants to test the concept before actually opening up for the use of a wider segment of its users situated all around the world. This is sensible because there is no such thing as a service that gets everything perfect right from the start, meaning that Facebook's experiences from the launch will prove invaluable for its continuing efforts to turn out a better service for its users. Combined with its stated intention to add more and more features to Marketplace as time passes, this could make it a serious challenger to existing e-commerce sites such as eBay and Craigslist, meaning that those entities should keep a cautious eye out as it continues to see use.

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Garrett Parker

Written by Garrett Parker

Garrett by trade is a personal finance freelance writer and journalist. With over 10 years experience he's covered businesses, CEOs, and investments. However he does like to take on other topics involving some of his personal interests like automobiles, future technologies, and anything else that could change the world.

Read more posts by Garrett Parker

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