We know Amazon as a seemingly invincible e-commerce giant that keeps on growing, helping small and medium-sized businesses to grow with it. Of course, if they follow their rules.
However, Mark Zuckerberg’s new shop feature for Facebook and Instagram might just give Amazon’s CEO Jeff Bezos a run for his money – strong competition is heading into town.
With a huge surge in online spending spurred on by the Covid-19, Amazon was overloaded with sales and a jump of 26 percent in first-quarter revenue. That’s $75.5 billion in sales revenue during the first quarter of 2020 alone.
There are now over 100 million Amazon Prime members and numerous studies revealing that over half of all product searches begin on Amazon.com.
With stats like these, it’s not hard to understand why more than 300,000 small and medium-sized U.S based businesses choose Amazon Marketplace as their platform, selling all over the world to marketplaces in United States, Germany, United Kingdom, France, Italy, Spain, Canada, China, and Japan.
Facebook And Instagram Rolling Out New Feature: Shops
On May 19th, 2020 the new shop feature was rolled out on Facebook and Instagram. This is a big move into e-commerce for the social media giants who previously only dealt with advertising.
Although there were already plans in recent years to launch support into online commerce, the process has been speeded up by the economic effects of Covid-19 to help (in particular) small businesses, which can now list goods they have for sale on social networks.
Social media giant introduced the feature as a new online shopping experience:
”Facebook Shops is a mobile-first shopping experience where businesses can easily create an online store on Facebook and Instagram for free. Shops let you choose which of your items you want to feature, merchandise with product collections and tell your brand story with customisable fonts and colours. In Facebook Shops, you’ll be able to connect with customers through WhatsApp, Messenger or Instagram Direct to answer questions, offer support and more.”
The Facebook and Instagram profiles of businesses will act as ‘storefronts’, where customers can browse ‘catalogs’ of products and directly buy items on Facebook or be linked out to other places online.
Shops can be found not only on businesses’ Facebook pages and Instagram profiles, but they can also appear in stories or be promoted in ads. Products that businesses have made available for purchase will appear within the shop, and users can either save items or place an order.
In addition, they also announced partnerships with popular eCommerce store platforms like Shopify, BigCommerce, WooCommerce, Channel Advisor, CedCommerce, Cafe24, Tienda Nube and Feedonomics.
There are also plans to create a shopping destination on Instagram where users can find a range of products to buy and Instagram Shop will be a button permanently on user navigation bars later in 2020.
There is estimated revenue of $10 billion to be made from Instagram shopping by 2021.
What Does This Mean For Amazon Sellers?
Although Amazon undeniably offers some great opportunities to third-party sellers, there are potentially serious risks that come with them.
As a seller you could be blacklisted or suspended from Amazon at any time (if their policies are infringed), effectively shutting down your entire business online and making it difficult to reinstate a seller account.
For this reason, many sellers are cultivating their own brands and trying to tempt their buyers off Amazon to different platforms, in this way becoming more independent outside of Amazon.
Facebook is taking a different approach to companies that establish storefronts with the Shops feature, by not charging a fee or taking a percentage of sales – only if the Facebook checkout feature is used to process payment.
Payments accepted using an external e-commerce software firm are not subject to the 5 percent charge.
Although the Facebook checkout charge is higher than the average payment-processing fee, it’s still less than that of Amazon.
With the Shops feature on Facebook and Instagram, Zuckerberg is looking to offer small business merchants a way to sell online without the cons experienced on Amazon’s Marketplace and with more flexibility, control and lower fees.
The ability to buy directly on social media platforms with a single click is a natural progression for existing customer bases on social media. It’s certainly an interesting time for e-commerce and a challenge to Amazon’s monopoly.
We’ll keep an eye on any further updates and new opportunities for sellers. In the meantime, if you need any help with listing optimization and/or translation to make sure your listings are top-notch for all Amazon marketplaces (the US, EU, Japanese) contact us here or email directly at firstname.lastname@example.org.