Facebook Marketplace was introduced in 2016 as a place for people to buy and sell within their communities. Think Craigslist, but with Messenger.

But plans to incorporate more brands into the platform mean that big changes are underway. In June 2018, Facebook announced the option for businesses to place ads in Marketplace. And soon Facebook will add more B2C options to the C2C platform.

In other words, think Amazon with a hyper-targeting algorithm.

So, how does Facebook Marketplace work exactly? And what can businesses do to prepare? Read on to learn which features are currently available and how to plan for what’s in store.

Bonus: Download a free guide that teaches you how to turn Facebook traffic into sales in four simple steps using Hootsuite.

What is Facebook Marketplace?

Facebook Marketplace is an online shopping channel. It’s a place for Facebook users to buy and sell from each other locally.

As of May 2018, Marketplace is used in more than 70 different countries by more than 800 million people each month.

You can access Facebook Marketplace in the Facebook app and on desktop:

  • On mobile, click the white storefront symbol at the bottom of the app on iOS and at the top of the app on Android.
  • On a desktop web browser, click the red and white storefront symbol in the left margin.

Listings in Facebook Marketplace are organized by categories like Entertainment, Vehicles, Housing, and Hobbies. Shoppers can filter searches by price and location, and save listings for future reference.

Each listing can contain up to 10 photos along with a description of the product.

Interested customers can message sellers directly on Messenger to ask questions.

Facebook Marketplace ads

Ads in Facebook Marketplace appear in-feed when someone browses.

These placements have the advantage of reaching people where they are shopping. Advertisers have seen a marked increase in conversion rates compared with News Feed placements.

Facebook Marketplace Shop listings

For now, only companies in the US can apply to list and sell products in Facebook Marketplace. Auto dealerships in certain locations are also allowed to list vehicles through inventory partners.

Brand listings currently appear in two areas on Marketplace: in the Shop category and in the Daily Deals category. (As of January 2019, this content is only visible to US users.) Only hand-selected businesses that offer brand-name products at discounted rates are eligible for the deals program.

Facebook doesn’t charge list fees or take a cut of commissions. So for brands approved to list products, Marketplace is essentially a free, organic distribution channel. But Marketplace listings require a Facebook Checkout integration, which charges a $.30 and 2.9 percent fee for every transaction.

The deals program

There are three tiers to the deals program: the Everyday Deal, the Featured
Deal, and the Lighthouse Program.

Better deals are placed into higher tiers that offer higher exposure. For example, brands that offer exclusive deals in the Lighthouse Program may benefit from top placement, consumer subsidies, on and off-site marketing, and influencer outreach.

Ads and shop listings have the advantage of Facebook’s targeting algorithm, which will surface your content to the most likely customers.

Who is eligible to sell on Facebook Marketplace?

Right now there are two primary avenues for businesses interested in selling on Marketplace.

You can either apply to list in the Facebook Marketplace Shop, or apply to be a deals partner. Remember, applications are currently only open to US merchants and automotive companies.

How to apply to list in the Facebook Marketplace Shop

To apply to sell on Facebook Marketplace, Page admins need to complete the Marketplace eCommerce Retailer Interest Form. Because access to Marketplace is limited, working with one of Facebook’s listing partners, such as BigCommerce, Shopify, or Zentail is a definite advantage.

To apply, retailers must be able to meet these requirements:

  • Sell new products to consumers
  • Business based in the US
  • Orders must be fulfilled within three days and received within seven days
  • Accept returns up to 30 days
  • Product listings must include a name, description, additional product images, and a thumbnail image on a solid background. No graphic overlays, text, icons, or badges should be on images.

Companies from the following industries have been prioritized to sell on Marketplace: beauty, apparel and accessories, bags and luggage, baby and kids, home décor.

How to apply to become Facebook Marketplace deals partner

Businesses that meet the criteria to list on Facebook may also qualify for the deals program. In order to be considered, pricing for deals must be at least 15 percent below the manufacturer’s suggested list price (MSRP).

Categories prioritized for Daily Deals include: consumer electronics, home, gift cards, gaming, toys and games, intimates and hosiery, footwear, sports and outdoors, beauty, jewelry and watches, and apparel and accessories.

Facebook has launched a beta partnership program for companies in the automotive and housing rental industries. If your company is eligible, you can apply here.

If not, watch this space for future updates.

How to prepare your business page for Facebook Marketplace

Open a Facebook Page Shop

All Facebook Marketplace listings must have a Facebook Shop on their business page. Plus for a limited time, there’s a chance that business with shops may have products featured in Marketplace as the rollout unfurls.

Shops are your Facebook storefront. Any business page can have a shop, but the availability of different features will depend on your location.

Payments on your Facebook Shop can be setup for checkout on your website (or another one like Paypal), or directly on Facebook via integration with Facebook Checkout.

Your shop content can be shared, saved, used in advertisements, and migrated to Marketplace. To open up shop, you’ll need to add at least one product to be reviewed and approved.

Learn how to set up shop here.

Launch a product collection

The products you sell from your shop can be organized into collections. The better organized your collections, the easier it is for customers to find and buy products.

You can create special collections just for Facebook, or mirror your collections to match your website’s organization scheme. Products can be added and removed from collections at any time, and you can have up to 50 collections available.

As a general rule, the higher quality the images and the more information you provide in each product description, the better. For maximum effectiveness, follow Facebook’s product image and description guidelines, especially since this will line you up with requirements for potential Marketplace integration later on.

If your business is approved for Facebook Marketplace, products featured in your shop can be distributed in the marketplace feed. Ensure your images and text adheres to Marketplace specifications in advance. (Remember: solid background, no overlays.)

Integrate with Facebook Checkout

You can run a shop without Facebook Checkout, but online retailers that want to use Marketplace should add it to their page’s shop. For the time being, this feature is only available to retailers in the US.

Facebook’s payment feature allows people to buy products directly on Facebook without having to leave the app of website. Payment solutions with less friction automatically improve conversions.

Another advantage to Facebook Checkout is that customer forms are pre-populated, making the checkout process run even smoother.

6 ways to use Facebook Marketplace for your business

Whether listing products or running ads, there are a lot of opportunities for businesses to benefit from the Marketplace channel.

1. Test with Facebook Marketplace ads

Whether or not you can list products on Marketplace, ads with placement in Marketplace are a good way for your business to test the waters.

In an effort to grow its business, BarkBox decided to run a split-test campaign to promote its monthly dog treat and toy subscription service. They evenly divided the audience for their ads between News Feed alone and Marketplace and News Feed placement.

The campaign performed markedly better when ads were served in both feeds, with 49 percent greater reach and a 16 percent higher conversion rate.

To create an ad in Marketplace, go to Ads Manager and choose reach, traffic, conversions, catalogue sales or video views as your objective. Marketplace is not currently available as a placement by itself. That means you should choose Automatic placements or edit placements to include the News Feed and Marketplace in your campaign.

The recommended specs are the same for both spots.

2. Maximize your budget

Since there’s no cost to list and no cut on commissions, Marketplace listings are a budget-friendly way to promote product sales. But even if you don’t have access to list on Marketplace yet, ads in the shopping channel have resulted in decreased conversion costs for brands.

For example, to test Marketplace’s impact on cost-per-conversions, Apartment Guide, a rental listing service, set up two-week trial. The study found that Marketplace ads contributed to a 200 percent lift in conversions and a 45 percent decrease in cost per incremental conversion.

3. Offer daily deals and promotions

Facebook has been experimenting with a Daily Deals feature for more than a year, and it’s likely to remain an important piece of the Marketplace channel.

In August, e-commerce company Daily Steals ran a promotion for Playstation 4 controllers as an early Facebook Marketplace deals partner.

Placement in the deals category translated to five times faster sales for Daily Steals compared with similar offers sold elsewhere. The company also saw a two times higher conversion rate when shoppers used Facebook Checkout as opposed to completing the payment on its website.

4. Launch a new product

Buzz and awareness campaigns are multi-platform for a reason. And if one of your goals is to obtain pre-orders or early registration, Marketplace is a good place to gauge early consideration.

To promote the upcoming release of Tom Clancy’s The Division 2 Phoenix Shield Collector’s Edition and encourage pre-orders, Ubisoft launched a campaign with ads in Marketplace. The ads targeted lookalike audiences based on people who had recently made a purchase at the Ubisoft store and people who had visited its website.

In two weeks the company was able to unlock a thrill-worthy level of buzz, reaching upward of 3.4 million people.

5. Boost your sales

If you run a small or medium-sized business with less-than-perfect online retail setups, Marketplace can be a good alternative. But even the largest businesses with the slickest sales features can boost sales by adding another distribution channel to their online retail portfolios.

Beach-themed retailer Tropical Breeze Décor turned to Facebook Marketplace to offset expensive customer acquisition methods and streamline operations. The company now generates 72 percent of its revenue from the platform.

6. Think beyond sales

Marketplace excels at conversions thanks to its audience of motivated shoppers. But sales are not the only thing you can do on the channel.

For example, apartment-rental company Apartment List used Marketplace ads to increase registrations on its site. The ad copy targeted shoppers’ mindsets with taglines like: “Moving Soon? We Can Help You Find Your Next Home.”

The Marketplace ads led to a 17.5 percent higher reach than News Feed ads alone. They also produced a 16 percent decrease in cost per website registration.

More importantly, Apartment List was able to forge a longer lasting connection with prospective customers.

When you plan your next online retail and social media marketing strategy, make sure that your Marketplace efforts align with your overall goals.

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