Facebook does it all:  e-commerce makes a debut on Facebook

By Alicja Gados

Facebook is expanding into e-commerce with the launch Marketplace, an app that allows you to buy and sell from people in your local area. It’s sort of like a feature-packed Craigslist, which is also based on marketing to local buyers and sellers.  This new functionality allows members in a local network to buy and sell from one another.

The service was introduced on October 3. 

Centralized e-commerce

This new step in e-commerce functionality gives a centralized place to buy and sell items on the social media platform, and also expands Facebook functionality. Free to use for now like most new features, it will likely eventually be a pay per use and a revenue source for Facebook as the social media giant expands it’s revenue generating opportunities.

Facebook is leveraging the explosion of e-commerce traffic: most people make their ecommerce purchases over tablet, laptop or desktop. This is not the first time Facebook is stepping into e-commerce; in fact, it’s done this twice before.

First, if this word Marketplace sound familiar to you, it’s because his isn’t the first time Facebook has introduced it. Initially a classified service listing items for sale, even housing, jobs and more, the experiment never gained traction, was returned to the platform powering it, and officially shut down in 2014. 

You may also recall that Facebook already had ‘marketplace’ type functionality, also in the form of groups. You’ve probably seen this. Buy and sell groups are pages created by people to offer a centralized place where people can swap or buy goods. These pages have been tremendously popular and include 1.57 billion monthly active users. This may be what inspired Facebook to introduce a dedicated functionality. About 450 million users of Facebook use the buy and sell groups every month.

Facebook has noticed the increasing popularity of these, and decided to leverage to give users a better platform to do what they have already been trying to do.

How it works

Marketplace helps users discover items for sale around them. To visit Marketplace, tap the new icon on the bottom of the Facebook app, this allows you to start exploring. The app opens with photos of items for sale that are in your area. If you are looking for something specific, you can filter your search by location, category or price. You can also browse different categories like household goods, electronics and apparel. The app features a built in location tool that allows you to adjust the region or location you want to look in, but you can manually select a different city altogether.

How Marketplace looks like on your phone. Image from Facebook Newsroom.

How Marketplace looks like on your phone. Image from Facebook Newsroom.

Once you locate something that you want, click on product details. These will tell you the product description, name and profile of the seller, and will give a general location. You can save the item to view later. When you’re ready, you contact the seller by messaging them that you’re interested in making an offer. From there payment and pick up details are worked out between buyer and seller. Facebook simply brings buyer and seller together.  We can assume that eventually, Facebook may facilitate the payment and/or delivery of the items, as an extension to the service. 

How to post items for sale

You can add items for sale right on your phone. You take a photo of the item or select it from your camera roll, enter the name of the product, a description and price, select and confirm your location, pick a category and post. Potential buyers in your area can message you directly if they are interested.  The marketplace will keep track of your saved items, products you’ve posted for sale and messages about the products with people. 

Only on mobile

I’ve tried to check this out, but unfortunately (and perhaps not surprisingly), marketplace is not available in Canada yet.  The functionality has rolled out in the US, UK, Australia and New Zealand. It’s also only available on mobile for now, but desktop compatibility will be rolling out soon. 

So far, the system lacks a two- way rating system, which keeps these types of exchanges honest, discourages spamming and abuse.  There is no dedicated checkout or payment option – leaving users to work out the details themselves. 

Businesses and organizations use Pages to promote themselves on Facebook, but the Marketplace functionality is not yet allowed on Pages. In the future it’s conceivable that ad space would be offered for sponsored placement on these pages. But that would come later; first, Facebook has to figure out if people will use the platform for e-commerce. If they do we can assume that they will attempt to monetize it. 

Facebook is serious about Marketplace

By putting the Marketplace tab in the navigation bar, Facebook is letting us know they are really banking on the popularity of the tool.  They really think you’ll like it, and they’ve even replaced the Messenger shortcut with Marketplace.  This is a prime location and could be susceptible to impulse buys.

Facebook is simply trying to do it all.  They create their own version almost every popular activity out there on the web – chats, photos, videos, marketing and more.  By owning more of the e-commerce experience, they have the potential to earn more revenue, direct and indirectly through ads. 


The introduction of marketplace means that Facebook is officially competing with popular e-commerce sites eBay and Craigslist.

Craigslist thrives because it’s dead simple, flexible and was there first. With incredible inertia, buyers and sellers both swarm back to the site due to it’s incredible aggregation of supply and demand. The site lacks fancy features, but the enormous bulk it has attracted has made it unbelievably popular. So who cares about extra features?

But people do want extra features. Certain providers that add value are taking away business from Craigslist. For example, Airbnb has taken a chunk out of the short term rentals market.  I used to use Craigslist religiously looking for rentals, but now, Airbnb is so much nicer to use, with profiles, user rating, feedback, stunning, large photos, and ability to use the site for payment. 

It can be said that using Facebook for e-commerce can help establish trust.  It’s hard for people who want to scam or spam the system to imitate a fake profile with tons of friends and photos.  The lack of info could be a clue that perhaps you shouldn’t be entering a transaction with the person.  Plus, there is more accountability, too. If someone does cheat you they would be much easier to track down.

Here are some of the ways Facebook can use Marketplace to build revenue streams

·      Charge retailers for posting ads

·      Sell space in search results for targeted groups

·      Offer in-house checkout services (like Airbnb) for a fee

·      Acting as a shipping liason through a third-party shipping provider, and charging a fee for the service

Stay tuned for the Marketplace app coming to your mobile phone!


Sources and Further Reading

Forbes.com forbes.com/sites/curtissilver/2016/10/03/facebook-marketplace-buy-sell-bff-strangers/#197dff182981

TechCrunch.com techcrunch.com/2016/10/03/facebook-marketplace-2/

Twice.com Blog http://www.twice.com/blog/executive-insight/facebook-s-marketplace-app-expands-its-e-commerce-footprint-and-opportunities/63276

Facebook Newsroom newsroom.fb.com/news/2016/10/introducing-marketplace-buy-and-sell-with-your-local-community/