Updated to include Shoptab. See below.
It’s been just about 3 weeks since SingleFeed started testing its Facebook application. I’ve fielded a lot of questions about the potential for selling on Facebook and the different options out there for merchants. Now that I’ve delved into the opportunity a bit more, and we have plenty of stores in Alpha, I wanted to give everyone a quick update.
The Potential
With so many consumers on Facebook, merchants have to have a presence on Facebook. It starts with a fan page, but no one really knows where it ends. I view Facebook as an online marketing channel that should be viewed just as one views an affiliate program, seo, ppc, blogging, tweeting, email or shopping engines. Facebook allows merchants to develop a deeper relationship with customers than most of these marketing channels, though, so there’s a little more to it than just thinking like a metrics oriented marketer. Facebook presents an opportunity to interact with Fans of your brand or products. We’ve all been talking about interacting with our customers for years, but with a big ‘ol Wall of posts up front and in your face, more than ever, merchants have an opportunity to listen more and provide shoppers/customers what they want; be it access to designers, special/exclusive offers, meetups, contests, or even a Facebook shopping experience. Facebook also allows for a more viral marketing opportunity.
We’re starting to read about a big splashy Facebook marketing success story every day. Yesterday the NYTimes had a piece about Disney Tickets Together and WSJ had a piece about Merchants Pushing Sales through Social Media. But that said, merchants still have to test, track, and iterate before jumping into the deep end of the social commerce pool. Note that in the WSJ article, Guitar Syndicate doesn’t know if Facebook is actually driving sales and Ski & Sun Sports says that Facebook sales “account for barely 1% of the company’s overall online sales.”
Merchant Options for “Selling” on Facebook
In this post, I’m not talking about adding the Like button to your website or setting up a fanpage. I’m assuming that both of those have happened or will happen (at least as long as the merchant gets to ‘own’ their presence on Facebook). What I’m going to run through are the options I know of for adding some type of shopping experience to a merchant’s Facebook page. There seem to be two schools of thought right now: programs that allow for transacting on Facebook and programs that list products and drive the consumer to transact off of Facebook.
Transacting on Facebook:
Alvenda – made a splash by launching 1800Flowers’ in-Facebook store. Alvenda basically has taken 1800Flowers.com and put it in a Facebook page. Alvenda’s CEO puts it well: “The majority of future online sales will happen offsite. Customers will be able to shop with brands wherever they happen to be on the Web, whether they’re on YouTube, a favorite blogger Web site or in Facebook.” While I don’t completely agree with that comment, the idea is sound. More and more conversations about brands and products are taking place away from a merchant’s site and a merchant need to look at that as an opportunity. Besides 1800Flowers, look at this Brooks Brothers Facebook shopping site. I’ve heard that a Alvenda Facebook Shop can cost $20K.
Fluid Social – made a splash launching a 3-day store for Jones Apparel. Fluid can create Lookbooks and other creative avenues like My Jansport Favorites to help insert the merchant into the conversation. Like Alvenda, Fluid can also cost $20K.
Payvment – Payvment is definitely for the very little guy compared to the market for expensive and flashy solutions from Alvenda and Fluid. The App allows a consumer to quickly and easily view products and add to a cart. The company is getting some good buzz, but looking through the comments for the App, I’m definitely not getting a sense that they are powering anyone of significance and it was strange to go through the comments and find dead end after dead end (comments from merchants who didn’t have the App up and running). The solution can work for a larger retailer, but for now, it looks like they are attracting small Etsy-like stores. Here are some examples: New Hope Beads and Orglamix. Payvment just announced they closed $1.5M in funding, and in the announcement say that “over 20,000 businesses and individuals have started to sell goods on Facebook and over 500,000 Facebook users have shopped for products in stores using the Payvment app.” Please note that it doesn’t say there have been 500,000 sales!
Transacting off of Facebook:
Sortprice: Sortprice was very early out of the gate with their Facebook application and with over 1000 stores up and running, they have to be #1 in terms of real (not tiny little merchants) Facebook stores up and running. Sortprice enables a Facebook presence for any merchant that works with them for their shopping engine program for FREE. Here are some examples: TigerDirect and Evogear.
Wishpot: Wishpot is a bit of a mystery to me. They offer social commerce solutions for merchants, but they seem to be concentrating more on basic wishlists for consumers. The look and feel of a Wishpot Facebook stores is great, definitely better than Sortprice and Payvment Facebook Shops, but you’re going to have to pay. Looking like Teavana or C&C California is going to cost you a couple thousand dollars. Wishpot is also sending merchant offers to Twitter.
Shoptab: I don’t know anything about these guys and haven’t hear much about them, but I like the idea that the founders are store owners, or so the website says. According to their LinkedIn profiles, Jay Feitlinger and Bret Giles both seems to have good internet marketing and ecommerce experience. They set up a support portal through Zendesk, but it hasn’t been updated since late last year. Not sure if this is a side business. The Shoptab blog is a bit more active and the App page is full of comments. Shoptab costs $10, $15, or $20/mo depending on SKU count. Example stores: The Reptile King, Wholesome Productions, and the Coca-Cola Store. Paul Cheney from Practical eCommerce wrote about Shoptab last week.
SingleFeed: We’re Alpha testing our solution. It’s free and takes 5 mins to set up, which seems to be much different than most of the other solutions available. It’s based on the Google Merchant Center data feed, which almost all serious merchants have at this point, and runs off of Google App Engine. The feedback we’ve gotten so far is all about customization. Merchants want to be able to feature Sale products, Special offers, one-day Sales, etc. We’ll have our Beta out in a week or 2.
There are other solutions for setting up a Facebook shop, but these are the players I think are serious. There are many shopping carts and ecommerce platforms (Big Commerce, Cartfly, etc.) that allow merchants to sell their products directly on Facebook, but if you’re a merchant, please don’t make a decision on an ecommerce platform based on this one feature.
I’m not the first to report on this. Make sure to read Inc.’s coverage from April.
Posted by Brian Smith 
