Facebook has launched a new product that will allow small businesses to set up ‘shops’ on its apps. Facebook Shops is aimed directly at businesses, allowing them to sell straight to customers.
Why set up a Facebook Shop?
With over 2.6 billion monthly active users as of the first quarter of 2020, Facebook is the biggest social network in the world. (Active users are those who log in to Facebook during the past 30 days.)
During the last reported quarter, Facebook said that almost three billion people were using at least one of its core products (Facebook, WhatsApp, Instagram, or Messenger) each month.
“Our goal is to make shopping seamless and empower anyone from a small business owner to a global brand to use our apps to connect with customers,” said Facebook founder Mark Zuckerberg.
Facebook’s current e-commerce product, Marketplace, which was launched in 2016, allows users to sell personal belongings to each other.
However, Facebook Shops will allow businesses to set up a single online store on both Facebook and Instagram. A checkout feature will enable in-app purchases.
Are Facebook Shops a real threat to Amazon?
Will Facebook Shops pose a threat to Amazon? If the user experience is good, then yes. The advantage Facebook has is that it’s able to show product tags underneath live videos and people can buy goods while watching videos. This is a powerful proposition and could change the way businesses advertise and sell products.
Facebook Shops – the business model
Shops will be free for businesses to use. So how does Facebook make money?
“Our business model here is ads,” said Zuckerberg. “So rather than charge businesses for Shops, we know that Shops are valuable for businesses. They’re going to in general bid more for ads and we’ll eventually make money that way.”
Read more: How to set up a Facebook Shop.