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Facebook Stores Come Up Empty
InfoCommerce Group -- Specialized Business Information Publishing Expert InfoCommerce Group -- Specialized Business Information Publishing Expert
For Immediate Release:
Dateline: Philadelphia, PA
Thursday, May 28, 2020


Facebook recently rolled out, to great fanfare, a new offering called Facebook Stores. In brief, it allows businesses with Facebook pages to add e-commerce functionality to those pages. It’s a free service to businesses, because Facebook hopes to profit mightily off transaction fees and additional advertising on its sites. Reportedly, over one million businesses have already signed on to use this new feature.

 It’s a bit difficult to assess the significance of this new offering. This is inarguably a smart, if not particularly inspired move by Facebook to cut itself (as all marketplaces and platforms dream of doing) into the revenue of the businesses on its site. But the value Facebook adds through Facebook Stores isn’t all that large. That’s because, despite its huge base of users, Facebook isn’t doing anything to drive these users to Facebook Stores. Anyone who makes a purchase through Facebook Stores is an existing customer or prospect of the store owner or has been driven there by paid advertising on Facebook. Nor does Facebook offer any classification structure or taxonomy to help its users discover businesses on Facebook. You really need to already know they are there. Indeed, businesses can’t even really use Facebook Stores in place of an ecommerce website because Facebook business pages provide only limited access to non-users of Facebook. In many ways, I feel about Facebook Stores the way I feel about Apple’s App Store: yes, it will make a lot of money, but imagine how much money it could have made had it been done right. 

 For those who are writing breathlessly about Facebook Stores as the dawn of “social commerce,” there is a theme. First, they say, forget about Facebook and focus on its sister company Instagram, where brands can promote new products and users can order them seamlessly. It sounds interesting, but when you pick it apart the same issues arise: you’re spending money with Instagram to build your audience and drive traffic, and then you give a percentage of your revenue to Instagram in exchange for capabilities you already have on your website.

In short, Facebook Stores is a smart move for Facebook. Is it a smart move for small businesses? I remain unconvinced. As the saying goes, “If your business depends on a platform, you don’t have a business.” 




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