Just a little more than a month ago Sean Hoy launched a Facebook store for his tattoo lifestyle products company INK-EEZE. The company, which has 765 fans, will be testing out a shopping plugin on its Facebook page over the next year.
“Because it was free, we jumped on board, but we have yet to close a sale,” said founder and CEO Hoy, “Facebook is something that is important for marketing, but I am not sure how important it is for sales yet. “
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The temptation of revenue opportunities within the social juggernaut that is Facebook is prompting business owners to explore F-commerce, shopping via Facebook stores. But this relatively-new sales channel is still proving itself against online giants like Amazon and eBay.
“A Facebook store allows business owners to be where customers are and provides them with a new channel to make money,” said Brenna Johnson, product marketing manager of B2C E-commerce and mobile solutions at Endeca Technologies. “But Facebook is a totally new and emerging market. Business owners need to have realistic expectations because even large retailers are only seeing a small uptick in sales quarter to quarter.”
Ed Stevens, founder and CEO at Shopatron, a provider of e-commerce solutions, has tested F-commerce with 25 of the 1000 stores his company works with.
“We have not found much success with stores located inside of Facebook. However, it is an incredibly important place to market, build and plan,” said Stevens. “Experimentation in a Facebook strategy is merited even without evidence of significant business results.”
For entrepreneurs exploring an e-commerce strategy, Facebook could very well serve as an avenue to get their feet wet if they are selling certain types of products.
“Facebook works best for business owners selling things that are a known quantity or that you don’t need to do a lot of research on or see the product from multiple angels,” said Scott Silverman, member of the Board of Directors at Shop.org and co-founder of ifeelgoods. He sees Facebook as a possible place to get started and test how customers will react.
That’s the strategy that Zalmi Duchman will follow when he starts selling his first product online next year through F-commerce. The Fresh Diet Cookbook, which is an extension to his meal delivery business The Fresh Diet, will be available to his 66,000 Facebook fans starting in January. “Down the line we can pursue an online store, but we figured for now, let’s start with Facebook,” said Duchman. “We have thousands of people following us who we cannot sell anything to because they are not in our delivery areas. Although we can’t bring them a meal, at least now we can bring them a cookbook.”
While people have no problem sharing their birthdates, details of their Vegas weekends, and latest plastic surgery enhancements on Facebook, the one thing they are hesitant to divulge is their credit card number.
Zac Borrowdale had sold his Suitjamas exclusively through Facebook and recently expanded onto eBay.
“We attract fans from all over the world…, giving them more and more content about us and our product, getting them increasingly excited as we communicate with them and then bam! We direct them into our store. The ones who don't trust Facebook are diverted into the eBay store, where most people feel more secure and we don't lose sales,” said Borrowdale.
Making customers feel secure is key to landing sales. “There are some people who are not 100% comfortable transacting through Facebook. You need to be where customers are and where they are comfortable spending money,” said Johnson of Endeca Technologies.
For entrepreneurs handling multiple sales channels, management becomes a balancing act. “Business owners need to consider if they are devoting too much time and money into [F-commerce] that they could be better investing into existing channels,” said Silverman of ifeelgoods.
Small business owners should be aware that the legal standards that exist in brick and mortar stores and through traditional online retailing also translate to F-commerce.
“Before business owners turn a Facebook page into a selling tool they need to consider that depending on the state, a purchase online may be subject to certain taxes,” warned attorney Rochelle Friedman Walk of The Flat Fee Lawyer. “With the Internet you can’t really control who sees you they way you would if someone walked into a store. But, you are still subject to local and consumer protection laws.”