Why Facebook Shops is a big deal for e-commerce
Hey what’s up everyone, this is Alan and today I want to share about Facebook Shops, why it’s a big deal for e-commerce, and how you can get in on the action from a side-hustle or entrepreneurial standpoint, as well as investing.
This is going to be an exciting one. Let’s go!
At the time of this writing, Facebook’s stock price hit an all-time high of 237 when they announced their big move into e-commerce with the company introducing Facebook Shops, a new part of the social media platform that will now allow merchants to directly list products on Facebook and Instagram.
So if you’ve been wanting to put your hipster fashion for pugs up for sale online, you’re about to get the chance to guilt-trip your friends into buying them.
This entry into e-commerce isn’t necessarily new as merchants have been able to experiment with selling their products on the platform via Facebook Page Shop and Instagram Shopping, as well as the p2p Marketplace.
However, this is the big push to put it all together and package it with a big bow on top to earn some extra diversified bucks for Facebook.
How many extra bucks? Well, according to Deutsche Bank, Shops can drive as much as $30 billion in additional revenue for Facebook because it will take a small fee from each sale.
Additionally, Facebook also has the chance to earn additional advertising dollars as more e-commerce brands hit the platform.
Get your piece of the rapidly growing e-commerce pie
Now, I know what you’re thinking: “That’s cool for Facebook, but how do I benefit? I want some of that $30 billion too.”
Well, if you’ve ever thought about having a side-hustle, becoming a full-time online entrepreneur, or have been wanting to take your physical goodies online, then now is an excellent time to start.
Facebook Shop is free to set up and while I haven’t seen it yet, my spidey senses are telling me that the platform will be super user-friendly to facilitate the ease of the merchant onboarding experience.
You see, Facebook will be able to promote Shop to their existing billions of users who are already very familiar with navigating the social media platform.
Existing users who have always wanted to start an online store but perhaps didn’t want to pay a monthly fee for an e-commerce platform like Shopify, or don’t have the time to design a whole website, or figure out the tech of one, now have the opportunity to get set up quickly for free on a platform they already understand.
That is one of Facebook Shop’s major advantages.
I even know of existing businesses that don’t have a website, yet they earn pretty great revenue just from their Facebook page.
Facebook Shops takes that to another level with a built-in online shop.
Shops allow brands the ability to sell their products on Facebook and Instagram via the pages, stories, and ads.
And for those with existing e-comm stores? It also allows for easy integration with third-party platforms such as Shopify, WooCommerce, BigCommerce, and more.
Those third-party integrations will help with back-end logistical needs, such as fulfillment, inventory, and more.
So if you’re looking for a zero-cost way to start an online store, Facebook Shops is a great way for you to start that side-hustle, full-time online business, or complement your existing website.
So, what’s the initial reaction to Facebook Shops?
Clearly investors and Wall Street are viewing this as a major move forward for the Facebook brand.
Morgan Stanley believes this could actually make Facebook a real e-commerce competitor to the current reigning champ, Amazon.
And at least some e-commerce points go to Facebook because their employees likely won’t have to pee into bottles to avoid being punished.
Facebook is concentrating on making Shops a “mobile-first shopping experience where businesses can easily create an online store on Facebook and Instagram for free.”
The storefronts are customizable so brands can differentiate themselves and will even have a chat feature to interact with customers.
And I don’t think I have to tell you how massive Facebook’s reach is on a global scale.
I know the younger kids nowadays don’t use Facebook at all because they’re too busy dancing on TikTok, but that doesn’t take away the fact that Facebook is still a behemoth.
Facebook itself still has 1.73 billion daily active users (DAUs) and 2.6 billion monthly active users (MAUs).
Then you add on their other super-popular apps like Instagram, WhatsApp, and Messenger, and the global consumer reach continues to climb.
So how can this be a game-changer for online shopping and how does it exactly match up with e-commerce giants like Amazon?
Well, think about it: When you hop on Amazon, you typically already know what you want to buy, right?
On Amazon, you go straight to the search bar and type in a keyword, whether it’s the type of product where you need to do a bit of research between the different companies or you already know which brand you plan to buy anyways.
On Facebook, you’re not on there to shop. You’re on there to see what your friends are up to, getting updated news, or checking out the influencers you’re following.
Maybe even some light stalking of an ex.
In other words, you’re more in discovery and curiosity mode.
When you’re in discovery mode, products may pop-up on your feed that you never knew you wanted.
A good example between the two is this: Shopping on Amazon is like going out on a date that you had your friend set up. You pretty much have an idea what you’re going to get.
Facebook is more like speed-dating, where you’re curious what’s out there so you try it out. With some people, you’re pleasantly surprised. With others, you’re wondering how they managed to get this far in their adult life.
…And then there are those that really piques your interest, but you know are probably not good for you…or your wallet.
Facebook Shops provides a different type of online shopping experience because now, users won’t have to even leave the platform to buy a product. They don’t have to click-through to the brand’s website and check out there.
All of this provides less resistance to buying online and extra convenience for shoppers.
I also believe that all of this plays into Facebook’s initial plans for developing its own digital currency called Libra.
While Libra has been met with a ton of criticism by users and government regulators, in my opinion, it is likely all intertwined.
I believe this is Facebook’s power push into developing and growing a unified global currency that takes away the resistance of global currency exchange conversions, its lack of technological advances, its high fees, and its general slow nature.
Facebook Shops won’t be met with any problems with regulators, but if Libra is pushed back into the picture, then I believe that’s where the company will encounter issues again.
However, Shops can easily be a cash-cow within itself, so Facebook can be perfectly fine without it.
What can you do as an investor?
If you’re not looking to build your own e-commerce store online, then another way for you to potentially financially benefit from Facebook Shops is to play the role of an investor.
And I will preface by saying that I’m not recommending you to buy any stocks here or giving financial advice. This is purely just online ramblings from a totally random person online.
However, this guy would love it if you hit that Subscribe button on my YouTube channel so that I’m no longer a random person to you.
With that said, if you believe this is a big deal for e-commerce and that Facebook can pull it off well, then investing in the stock for the long-term can be something you look into.
It’s tricky though, because it just hit its all-time-high and I personally never buy at those moments.
But you can always dollar-cost average into your position slowly so that you also don’t miss out if it does take off.
Another investing play would be indirectly checking out what other companies stand to benefit from Facebook Shops. An example would be Shopify.
Because Facebook Shops will integrate with Shopify, this will also drive users to the SaaS platform and if all is done well, it can prove to have tremendous growth for Shopify because of their more predictable monthly recurring revenue business model.
Tobi Lütke, CEO of Shopify said, “By pairing Shopify’s platform and commerce capabilities with Facebook’s reach and scale, we are reducing the barriers to entrepreneurship and advancing the future of commerce.”
Alrighty ladies and gents, I hope this was a helpful post and video for you in learning more about Facebook Shops.
I’m sure there will be a bunch more to share as it continues to be rolled out, so I’ll keep you posted on how it all matters to you as you go about your Freedom of Choice lifestyle.
To sum up this video, you can start to explore how Facebook Shops can benefit you in two ways:
- As a low-barrier, zero-cost way to start your side- or full-time hustle online by starting an e-commerce store and
- You can do your own research into companies like Facebook and Shopify and decide for yourself if they are good stocks to invest in as Facebook Shops continues to get publicly released
If you enjoyed this post, then head over to my YouTube channel to hit that Subscribe and Like button.
Thanks and once again, this is Alan signing off and here’s to you investing in your knowledge and future. I’ll see you soon.
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