It’s been a big week for companies seeking to be king of the hill with respect to e-commerce dominance. Shopify is doing its dead level best to be the online store for mom and pop shops and main street local. They’re doing a great job at it by the way.
Facebook announced Shops recently. With Shops, business owners can create a dedicated “shop” section of their Facebook or Instagram page and build out a catalog of their products for users to browse and buy. Importantly, most actual purchases won’t be happening on Facebook. Product listings will direct to a business’ existing website — unless it’s one of a handful of companies using Facebook or Instagram’s in-app checkout feature.
This is all great. Some see the Shops move by FB as another threat against privacy but the feature set is going to be robust. The company also plans to combine live video with shopping — a feature that’s coming to Instagram and Facebook “in the coming months” — which will essentially enable an influencer-lead version of QVC. Brands and influencers will be able to tag specific products before they begin a live stream and viewers will see prominent links to buy the items pinned to the bottom of the video. The move could also give Instagram’s biggest stars another reason to stick around, rather than depart for competitors like YouTube which offer influencers more ways to monetize their content.
These features are huge. I see the advantage at this point, if I had to choose between FB and Shopify going to Facebook. The video features with prebuilt community some of the brands and influencers have in place will be extremely scalable.
This post however is about how neither pose a significant threat to Amazon in the near future. The primary reason why? Amazon’s FBA (Fulfillment by Amazon) program and its network affects. For all the complaints lodged against the big A, it’s a go-to platform. When the mom’s and pop’s start to experience any degree of success out there, and it will be slow going, they will see how difficult two things really are.
- Driving traffic to your site or business page and..
- Packaging and shipping tons of products sold.
I predict that it won’t take long to see the light and the hassle associated with these issues. With both of the above methods, one will have to buy traffic. There will be few moms and pops out there that know how to effectively build traffic and get those carts humming. It’s a lot of work!
And packaging. Well, there is no free lunch. It’s time consuming and costly in space, people, and hard costs outside of those two areas are sky high.
Why is FBA so helpful to serious sellers? Here are a few reasons.
- It eliminates fulfillment headaches and allows scaling the business.
- It outsources storage, customer service, and returns.
- It offer free one- or two-day shipping to Prime members.
- One has the ability to display the Prime badge on eligible products.
- It improves the chance of winning featured offer spots on detail pages.