Retailers   //   April 20, 2020

It took a pandemic, but Facebook Marketplace is of increased interest to brands and retailers

For many brands, Amazon has become almost untenable — and they’re seeking out other channels for sales growth. For them, Facebook’s Marketplace looks increasingly enticing.

“One of the [platforms] that I’m most bullish on is Facebook Marketplace,” said Chris Palmer, founder of the e-commerce consultancy SupplyKick. While much of the work he does focuses on Amazon, many of his clients are “exploring additional marketplaces right now.” The Facebook option is certainly still in the test and learn phase, but it’s becoming more interesting to vendors looking for any way to grow and diversify revenue.

Marketplace has been a smaller but growing section of Facebook’s program. The social network has been trying to facilitate commerce on its site, and has offered a standalone section where people can buy and sell goods. For a little over a year, the company has let brands upload SKUs via integrations with platforms like BigCommerce and Shopify, in exchange for a 5% commission fee. While most of the transaction volume on Facebook remains peer-to-peer, with traditional digital channels like Amazon proving unreliable, more brands are beginning to dip their toes in the Facebook Marketplace waters.

The baby clothing brand SpearmintLove, for example, has been selling its products through Facebook for the last year — and has been seeing steady growth. On average, Facebook sales have been growing 30% month-over-month, said the company’s financial analyst, Alicia Kent. But the brand has seen an outsized bump in sales over the last month.

While SpearmintLove still sees the majority of its sales through its direct channel, Kent said that having the buy-now feature in posts makes for more aesthetically pleasing posts. “On each of our posts, we can tag the actual product, which makes it a little bit easier [for customers],” she said. It’s clear, she went on, that “people are getting more comfortable with shopping online — and specifically on Facebook.”

One of the big reasons behind this shift is the realization that relying on one sales channel — like Amazon — is risky. While some have turned to Facebook only for advertising, given that the rates have plummeted over the last few weeks, others have been adding SKUs to their Marketplace stores. “The way Amazon treated its ‘non-essential’ sellers the past month is enough for many of us to leave the platform and find new ways to scale,” said one brand owner whose prime sales channel was Amazon but has begun seeking out other options.

Facebook has trying to grow its Marketplace program for years. It started as a peer-to-peer platform in 2016 — and to the naked eye, it still looks mostly like a Craigslist alternative. But over the last year, the social network has been more actively trying to court brands to not only advertise their products on Marketplace but transact through it as well.

“Facebook is marketing to merchants pretty aggressively,” said MaryAnn Bekkedahl, BigCommerce’s vp of global business development. Much of this brand push started earlier this year, she said, but over the last few weeks “we have seen an uptick” in vendors testing out the Marketplace channel. For brands like Spearmint, sales have grown over the last few weeks too. “People are obviously at home a lot lately,” said Kent

“Overwhelmingly, more and more merchants are exploring Marketplace in general,” explained Bekkedahl, especially those that have seen channels like wholesale and brick and mortar completely shut off. Similarly, as SupplyKick’s Palmer noted, some Amazon brands — especially those that relied on Amazon’s fulfillment network and were now being de-prioritized — have been testing it out. For those, the most enticing factor is the reduced commission fee: 5% compared to Amazon and Walmart’s 15%.

Some agencies see an opportunity simply because of Facebook’s wealth of customer data. “Facebook has the market cornered on getting and keeping people’s attention,” Palmer added in a subsequent email. “It also has arguably the most user data out of any tech company on the globe, giving it a strong head start in creating one of the most personalized shopping engines in history.”

According to Jason Goldberg, Publicis’s chief commerce strategy officer, certain brands are showing an uptick in interest in both Facebook Marketplace and Instagram commerce options — but mostly small- to medium-sized operations or more traditional players looking for an easy way to sell excess merchandise.

“People are spending many more minutes on social networks,” Goldberg said. This isn’t an unprecedented behavior shift either. He pointed to China and specifically’s genesis during the SARS outbreak when brick and mortar retailers began listing items for sale on WeChat bulletin boards. “If you’re a brick and mortar retailer that hadn’t leaned heavily into digital,” he said, “you’re looking for platforms that are quick and easy and can generate some revenue.”

With that, Facebook Marketplace is one somewhat easy way to find customers where they are — sitting at home, mindlessly scrolling through a social feed. For now, this is one way to diversify revenue during the pandemic. But Goldberg isn’t sure this will mean longterm success for brands trying to sell through Facebook. For one, the platform is still quite simple — especially for big brands hoping to run campaigns and promotions. What’s more, it’s more tailored for product discovery, rather than finding a specific item. “I’m not seeing it emerging as a great platform for Adidas to launch their shoes,” said Goldberg.

At the same time, a number of social platforms are seeing upticks of user traffic, and therefore brand interest — namely, Instagram and Pinterest, said Goldberg. And they’ve all begun doubling down on commerce tools; Pinterest, for example, has unveiled a suite of new commerce features to respond to recent increased traffic. “I think Facebook Marketplace is another version of said,” he said.

But, he went on, “it’s not where you go if you’re looking for toilet paper.”