Facebook Marketplace was born three years ago as a social media garage sale — a place where neighbors could buy or sell outgrown clothes or unneeded baby cribs or castoff couches. It quickly morphed into a marketing tool used by a growing number of businesses to sell cars, condos and a wide assortment of consumer goods. It is changing the auto resale and real estate industries, and is poised to disrupt the way small businesses across America connect with customers.
“We see it as a business enabler instead of a disrupter,” Deb Liu, vice president of Facebook Marketplace & Commerce, told CO—.
The Facebook model, Liu explained, is “people-led,” meaning it looks at how people are already using the platform and sets out to make it easier. It saw that cars were among the most frequently bought, sold and searched for items on Marketplace, so it created partnerships that allow auto dealers to list their inventory and added links to sites like Carfax and Kelley Blue Book to those listings.
The popularity of Marketplace for apartment and home rentals led to a partnership with ApartmentList.com, for rental listings.
Facebook has also partnered with seven of the biggest e-commerce platform providers, including BigCommerce, ChannelAdvisor and Shopify, to allow small retailers to post and sell their e-commerce inventory directly on Facebook.
BigCommerce, which has offices in San Francisco, Calif., Austin, Texas, and Sydney, Australia, has thousands of clients who now sell products on Marketplace.
One of those, Hats Unlimited, a Southern California retailer with seven stores, saw sales growth of 20% to 30% directly attributable to Facebook Marketplace, according to BigCommerce. Another BigCommerce client, Sweetums Signatures, a stickers and decals business in Ohio, grew its sales by 33% after making its products available on Marketplace.
Being able to reach customers where they live on social media is crucial for retailers, Jimmy Duvall, chief product officer at BigCommerce said.
“Consumers are really staying in the social experience [while online], so how do you as a retailer get access to that consumer in that experience? Not everyone is starting with a Google search anymore,” Duvall said.
We see it as a business enabler instead of a disrupter.
Deb Liu, vice president of Facebook Marketplace & Commerce
Innovate
Facebook is finding new opportunities with its Marketplace. Looking for ways that your business can branch out? Read more here.
Marketplace’s reach has surged since its 2016 launch. By its second birthday, the platform had 800 million monthly users in 70 countries, according to a presentation by Facebook CEO Mark Zuckerberg. It is now used in 90 countries.
In the United States, one out of every three Facebook users is on Marketplace, according to the social network. With 186 million active monthly Facebook users in the United States and Canada, according to Facebook’s most recent annual report, that translates into a pool of potential customers in the millions.
Sellers and buyers don’t pay any fees to Facebook to use Marketplace. But Facebook gets something out of the platform — the ability to target ads to persons who are actively looking for cars, new homes, home furnishings or other purchases.
“All the marketplaces, all the social channels want to keep consumers within the experience because by doing so they’re able to sell advertising to the businesses that want to reach those consumers,” Duvall said.
The same features that make Marketplace attractive to suburban moms selling a used stroller are drawing businesses to the platform.
At a recent Facebook Marketplace event in the company’s New York City offices that CO— attended, individual users said they prefer Marketplace to anonymous listing sites such as Craigslist, because they can check out buyers and sellers through their linked Facebook profiles before deciding to connect with them.
Facebook’s Messenger function makes communicating with prospective buyers and sellers easier, allowing for instant feedback and decisions, they said.
Business-to-business and business-to-consumer lines blur
The lines between business and individual users are getting blurred. Facebook is rolling out enhancements that make it easier for craftspeople and small entrepreneurs to use Marketplace to grow a business. Those features include the ability to offer shipping with package tracking, to accept payment in Marketplace, and purchase protection for buyers.
Facebook already uses artificial intelligence to help individual sellers price their products, by showing them what similar items sold for recently.
Hundreds of cars pop up when users open Marketplace, but car dealerships currently seem to be using the site more for exposure than to close deals, Joe Overby, senior editor of Auto Remarketing and Auto Remarketing Canada, told CO—.
“My sense is a lot of them are using it as another way to get their inventory out to where the consumers are,” Overby said. “If you think about it, people are on Facebook all the time and they might as well see vehicles while they’re on there, too.”
“Most consumers are doing the shopping process online, in terms of at least shopping and researching, even if they’re not buying online,” he said.
Home buyers also are turning to social media to find and research houses.
A 2018 report by the National Association of Realtors found that 44% of home buyers began their search by looking at properties listed online, and that 90% used online websites during the home search.
New Jersey real estate broker Annekee Brahver-Keely said more homebuyers are asking about houses they spotted first on Facebook. Brahver-Keely said it is common for agents to post home listings on their personal Facebook pages.
The National Association of Realtors report found that 77% of realtors use social media for their jobs — Facebook being the most popular network with 97% of those using it, followed by 59% tapping LinkedIn and 39% turning to Instagram.
Big Commerce’s Duvall said he expects to see increasing use of Marketplace by retailers and other businesses.
“I really don’t see it slowing down in any way. Facebook is investing a lot of time and energy into Marketplace as well as commerce capabilities with their auxiliary products like Instagram, so I think it will only continue to grow,” Duvall said.
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