Exploring Facebook's Marketplace Leverage

Marketplaces
Written By Rick Watson

I've talked about Shopify building a marketplace.  However, Facebook will beat Shopify to a marketplace business almost certainly.  Shopify may not care, though.

One of my readers likes to point out Shopify already tried this idea and discarded it, but great companies come back to good ideas later on.  Amazon itself took 3 tries to nail its marketplace formula.

Facebook holds a lot of leverage in eCommerce at the moment.  CAC via Facebook is less than Google, and Facebook is one of only a few ways to acquire buyers who ARE NOT ALREADY looking for your products online, in desktop and mobile, at scale. 

This means that Facebook already controls the top of the funnel.  Shopify manages the bottom of the pipe. 

The bottom is more easily replaced than the top, as any salesperson knows.  Anyone can close a deal that's already handed to them.  Not everyone can generate their own business.  That's why Amazon is such a threat to both Google and Facebook in the future.  More and more, buyers go there first.

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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