Can You Sell on Facebook?

Gap, J.C. Penney, Nordstrom, GameStop are all national brands that opened a “Facebook Store” only to close it within a year, as reported by a Bloomberg report.  The reason being seems to be that it wasn’t cost effective.  The high development costs with low sales has led each of these large companies to determine that Facebook is not an effective place to sell actual goods.

Are they wrong in thinking stores won’t work on Facebook? That’s not a simple yes or no.

First, you need to look at the limitations that a Facebook shop has, versus a traditional website.  Chances are, your online catalog is wider than 520 pixels.  It probably isn’t loading through an iframe, either, which means that it can render itself, without having to pass through Facebook’s structure, first.  In essence, that means it is framed to fit your screen, not a small window, and that it isn’t being restricted in its load speed.

Your own website’s online catalog, without question, is more effective in its presentation of your goods catalog. Anyone who thinks a Facebook store will be more effective than a dedicated site is gravely mistaken.

Does this mean that no commerce can happen in a Facebook App? Can it be a coupon-only model?  I don’t think so. The sales model simply needs to be different than an online catalog.

There have been effective fire sales, featuring a single product at a blowout price.  Understand that this does not guarantee a lot of return followers.  If accurately promoted, you can have a huge influx of fans, that leave after making the purchase, to never visit your page again.  If you are using a fire sale as a way of creating permanent excitement to your brand, you may be setting yourself up for failure.

One of the deciding factors that establishes whether it makes sense is price.  It can cost a lot of money to develop Facebook Apps.  Therefore, if you are spending a lot on creative, without a solid return on your investment, then the store fails.  It only makes sense if you have the ability to get a Facebook shop put together without having a large expense.

It all comes down to your goal, and the goal of the potential customer.  Most people aren’t on Facebook to buy things.  It’s that simple.  However, if you can create a deal for potential customers that is good enough for the customer to forgive the fact that the offer is automatically shared to their wall, and that caters to impulsive buyers, it is possible to have an effective sale on Facebook.  You can set up a highly effective sales process.  It needs to not set you back much to build, or it will be considered ineffective.  

A big retailer, like Nordstrom, would actually have a harder time setting up a sale like this, than a small business would. On a local level, Facebook stores may work, and well, but when it comes down to national style pages with huge catalogs, Nordstrom is probably right.