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Facebook has announced the launch of a new service, Facebook Shops. Wondering if it’s worth it? Discover its pros & cons to determine whether or not this will be the right move for you & your business. 


In its bid to expand its e-commerce capabilities, Facebook has announced the launch of a new service, Facebook Shops (or “Shops” for short), which make it possible for small businesses to create online stores on Facebook and Instagram. Facebook Shops is designed to improve users’ online shopping experience and help businesses that have suffered amid the COVID-19 pandemic.

Both Instagram and Facebook already have some degree of an e-commerce functionality. Facebook has its Marketplace, while Instagram allows users to purchase products featured in ads & posts. However, the company’s new service goes further, allowing businesses to create a fully-fledged Facebook Shop.

Facebook Shops is designed as a mobile-first shopping experience and is free to use.

Businesses looking to use Facebook Shops simply need to upload their catalog and choose which items to feature and highlight. Business owners can customize the page to a certain extent – they can add a cover image and choose accent colors. Visitors can browse, save and order products – it’s that easy! Facebook Shops can be found on a business’ Facebook page.

Similar to Facebook Shops, the Instagram Shop is a new and convenient way for people to discover and buy products within the app. Instagram Shops will be discoverable through the Explore section where people can surf through products from their favorite brands, filter by categories, and make purchases – all in one place.

Launched on May 20, 2020, Facebook Shops comes as stay-at-home and quarantine orders related to the COVID-19 pandemic have led to record sales for e-commerce businesses[1].

If you already have an e-commerce site or a dedicated Facebook page for your business, you might find yourself asking, ‘Is Facebook Shops worth it?’.

To answer this question, we have listed down some of the pros & cons of the recently launched Facebook Shops.

 

PROS

Here are some of the advantages of using Facebook Shops.

  • Multitudes of users. Facebook and Instagram have over 2.6 billion[2] & 1 billion[3] active users as of 2020, respectively. This makes both of these platforms the biggest social media networks worldwide. With multitudes of users throughout the world, doesn’t these social networks sound like the perfect place to set up a business?

As a business owner, you naturally want to attract more customers to your store and if you are looking to expand your market globally, establishing an online presence online is a must. With Facebook Shops, you now have a platform to display and sell your products and services to billions of users worldwide!

  • Direct contact with consumers. Facebook provides a way for sellers and consumers to directly contact each other with the help of messages, video chats, and even through comments. Through this direct contact, both sellers and consumers can have peace of mind knowing that they are dealing with a legitimate seller/buyer.

CONS

Listed below are some of the disadvantages of using Facebook Shops.

  • You don’t own the platform. When you create your own e-commerce website, you don’t depend on anyone (except maybe the hosting owner, but they can’t affect your contents). You’re in charge – you define the rules and only you can change anything.

Conversely, Facebook Shops belongs to Facebook and you only rent a small space. The owner can do anything with their property – disable functionalities, change the costs of the space, and shut down any store. While they wouldn’t do such unpleasant things without any warning, the fact is that the owner has total control over the platform.

According to Facebook’s Commerce Product Merchant Agreement[4], Section 5: “You grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of any data, content, and other information provided by you or accessed by us in connection with the Merchant Commerce Features, including photos, videos, and Product Listing content, in connection with the Facebook Products.”

  • Loading time. Facebook Shops is designed as a mobile-first shopping experience. However, it’s worth noting that the Facebook app is quite heavy and can take a while to load properly. This slow loading time can discourage users and they might end up leaving your store right there & then.
  • It excludes people who are not on Facebook. As of June 2020, the current world population is 7.8 billion[5]. Out of that number, only 2.6[2] billion people are active Facebook users. As an entrepreneur, you are alienating billions of potential customers by only doing business on Facebook. So, don’t put all of your eggs in Zuckerberg’s basket – use other social media platforms and if possible, establish a brick and mortar shop, too. 

 

How Does Facebook Make a Profit?

Despite having more than 2 billion users on its platform, Facebook doesn’t actually profit on content or directly through its user base.

Instead, it profits off of digital advertising, as Facebook has something that companies really want – access to billions of people throughout the world who might purchase their products or services. In fact, so many companies advertise on Facebook that in 2019, Facebook earned about $69.66 billion from advertising revenue[6] alone!

What forms of advertising does Facebook use to make a profit? Here’s a quick list:

  • Self-Serve Advertising
  • Targeted Advertisements
  • Video Ads
  • Facebook Messenger Ads
  • Facebook Mobile

Would you like to start advertising on Facebook? Check out their Advertising Policies – https://www.facebook.com/policies/ads/

 

The Bottom Line

Facebook Shops provides a convenient way for consumers to shop online; however, just like anything else, it comes with its own pros and cons. This new platform can provide businesses with access to multitudes of users and direct contact with consumers; however, the downside is that you don’t own the shop itself, there can be a bit of a load time, and you’ll be neglecting billions of other users who aren’t on the platform.

Before diving into Facebook Shops, make sure to weigh these pros and cons to determine whether or not this will be the right move for you and your business.

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