For more than a decade, Craigslist, eBay & Etsy have dominated the peer-to-peer marketplace in which items are bought & sold. This has become the digital version of garage sales, except the products & services sold on marketplaces are far more diverse.
As it usually does, FB shook up the marketplace industry in October 2016 by announcing that it will relaunch Facebook Marketplace, putting more than a billion consumers in play in what is the biggest digital marketplace in the world.
But lost in all the excitement is the fact that FB Marketplace may not just be a platform where someone can get rid of a little-used product, but that it can offer new chances for users who sell products as a full-time occupation.
Let’s take a closer look at how FB Marketplace compares to Etsy and eBay, and how this new platform could help local businesses achieve new consumers
What Facebook Marketplace Offers
Despite taking regular hits from critics & consumers due to its status as the biggest game in town, FB has 1.86 billion monthly active users, 1.23 billion daily active users, as of December 31, 2016.
More than 85% of those users live outside the U.S. & Canada, which means that Facebook’s worldwide achieve far exceeds that of Etsy or eBay.
Facebook Marketplace offers browsing, selling & searching features.
The browsing feature allows users look around the app without making a specific request, and displays product listings. However, because this is FB, browsing is optimized to display products that users could like based on past activity on the platform.
In addition to products, FB Marketplace enables users to solicit job offers based on their skills, and to sell services targeted to a specific group of users / to all users on the platform.
But there’s one major restriction in terms of sellers – brands are not allowed to sell on the platform, nor are they let to place paid ads for Marketplace users to view.
That could change in the future, but for now, FB Marketplace is modeling itself after Craigslist, Etsy & eBay, and simply offering a place for buyers and sellers to interact without handling any payment processing / shipping.
The other drawbacks so far is that there is no review system on Facebook Marketplace, so it’s difficult for prospective buyers to gain a sense of a seller’s trustworthiness & credibility.
And because Facebook does not handle payment transactions, there is no built-in guarantee of delivery, or a system that ensures that if a product is defective / sent in a condition other than advertised, a buyer would receive a refund.
With that in mind, here’s how FB Marketplace stacks up against several other peer-to-peer markets.
Facebook Marketplace vs. Etsy
Etsy – which launched – has cornered the market on artisan products.
As of December 2014, Etsy said 54 million registered members, with more than 1.3 million sellers & 19 million buyers.
More importantly, 75% of the platform’s gross merchandise sales from 2011 – 2014 were through repeated business.
But Etsy remains primarily a web-based platform, with only 36% of its sales generated through mobile devices.
Like FB, Etsy has positioned itself as a social media network that encourages user connection, but unlike FB Marketplace, Etsy is heavily focused on vintage & collector’s items as well as hand crafted art, clothing & jewelry items.
As a result, Etsy’s appeal for full-time sellers is limited due to its strong concentrate artisan-made products.
Despite its cache, Etsy has a much more narrow market than what FB Marketplace is offering, and Facebook dwarfs Etsy in terms of number of registered users.
Facebook Marketplace vs. eBay
It goes without saying that eBay – which launched in 1995 – has begun one of the go-to marketplaces for peer-to-peer transactions.
In 2010, As per Statista, eBay had 167 million active buyers as of 2016, which is double the number of buyers that were on the platform.
Although it is known as a marketplace where users can auction just about any product or service imaginable, home & gardening is the most popular sector, with clothing, vehicles parts & electronic equipment also strong revenue generators.
However, unlike FB, which has a broad international reach, the majority of eBay users reside in the U.S., Germany & the U.K. That puts eBay at a disadvantage in terms of consumer reach throughout the world, which isn’t an issue with Facebook Marketplace.
However, eBay generates high customer service scores for ease of use, product satisfaction & the breadth of goods offered on the platform – it is this level of customer experience that makes eBay the biggest challenge to the success of FB Marketplace.
Ebay has had more than 20 years to establish its brand & to refine its customer service, which means that it is far more practiced in understanding customers lifetime value related to peer-to-peer transactions.
That speaks not to customer satisfaction, but customer trust, which is one of the major factors in branding.
Ebay handles payment processing as well as shipment, and its review system & product delivery guarantee offers a fail-safe for buyers and sellers that Facebook Marketplace cannot yet match.
Even though it has an obvious advantage in terms of registered users, FB Marketplace lags behind eBay in these critical areas.
Best Practices For Facebook Marketplace
Despite its ban on brands, FB Marketplace still offers exciting opportunities for individual sellers who have already established a profile on the platform.
Because buyers can search for products based on price & location, Facebook Marketplace is ideal for full-time sellers who are concentrating heavily on the local market.
Brands can take advantage of this new platform by creating personal profiles to sell their products, and profiles separate Facebook Marketplace from a platform such as Craigslist, where there’re few safeguards regarding who’s really selling a product.
FB’s profiles are integrated with whatever product a user is selling, which offers a greater sense of security & credibility, but that also means that sellers must take the time to make sure that their public profiles convey trust & honesty, which includes a clean, well-taken photo, and that they share information that builds confidence in a prospective buyer.
Because FB Marketplace orders items based on users’ interests, prior activity, it makes it easier for all sellers to hit their targeted consumer group more efficiently.
But to take advantage of targeting, sellers should list each item separately, instead of offering a slew of products, which could confuse buyers.
It’s important that sellers check other peer-to-peer sites to determine a price range for their items, so that they are in line with what prospective buyers would expect to pay.
Because FB Marketplace lacks buyer or seller protection, sellers must also be prepared for intense & prolonged negotiations to complete a sale.
FB Marketplace is the new peer-to-peer kid on the block, and while it has some negatives – like lack of peer reviews and lack of product & delivery guarantees – it offers sellers a massive database of consumers, within their local area.
Better yet, it segments prospective buyers based on previous activity & buying behavior, which helps sellers tailor their products.
And while Facebook Marketplace does not allow brands to sell on its platform, individual sellers with active profiles are afforded boundless opportunities to gain credibility & to brand their products, while reaching hundreds of millions of more consumers than are on eBay, Etsy & Craigslist, combined.