Facebook has become more than just a social media platform over the years. Today, it offers businesses and entrepreneurs various tools to grow and scale online. Two of the most popular products are Facebook Shop and Marketplace.
Facebook Shop allows businesses to set up an online store directly on Facebook. It has features like product catalogs, checkout and payment processing. Marketplace, on the other hand, is a section within Facebook where users can buy and sell new and used goods locally.
Both have their own advantages and disadvantages. The choice between using Shop or Marketplace depends on your business model and goals. This comprehensive guide will compare the two platforms across key factors to help decide which one is better for your needs.
Overview of Facebook Shop and Marketplace
What is Facebook Shop?
Facebook Shop is an end-to-end ecommerce platform that allows businesses to set up a digital storefront on Facebook. It enables you to:
- Create and manage product catalogs
- Run targeted ads driving traffic to your shop
- Provide seamless checkout with payment processing
- Offer discounts and deals
- Provide support through Messenger
In essence, Facebook Shop aims to provide an easy way for businesses to start selling online without needing to build their own website. It taps into Facebook’s huge user base to help merchants find new customers.
What is Facebook Marketplace?
Facebook Marketplace is a feature within the Facebook app that facilitates local peer-to-peer shopping. It allows users to:
- Post new and used items for sale
- Search for products listed in nearby areas
- Communicate with buyers and sellers
- Negotiate pricing and pickup/delivery
Marketplace is geared towards individuals and small businesses looking to sell goods locally. Unlike Facebook Shop, it does not offer built-in ecommerce functionality like checkout and payments.
Comparing Facebook Shop and Marketplace
Let’s now compare Facebook Shop and Marketplace across some key factors to understand their differences and target use cases better:
Product Range
Facebook Shop allows you to sell any type of physical product such as apparel, accessories, home decor, electronics etc. There are no restrictions on the product categories as long as they comply with Facebook’s commerce policies.
Marketplace is more suited for selling used, handmade or small batch items locally. Product categories like vehicles, real estate, services and gift cards are also common.
Target Customers
Facebook Shop helps access Facebook’s massive user base of over 2.93 billion monthly active users. Your products get visibility across geographies based on your shipping capabilities and ad targeting.
Marketplace only reaches local buyers in your city or neighborhood. The maximum shipping distance can be set to up to 100 miles.
Seller Account Requirements
To set up a Facebook Shop, you need:
- A Facebook business page
- A Facebook ad account with payment method added
Any Facebook user can start selling on Marketplace without additional requirements. You don’t even need a business page.
Listing and Product Display
Facebook Shop has robust catalog management options. You can add product descriptions, images, videos, pricing, inventory count, variants etc. Shop also provides analytics on product performance.
Marketplace has basic listing options. You can add a title, description, price, location, limited images and video. No detailed analytics available.
Checkout Process
Facebook Shop natively supports checkout on Facebook. Customers can select shipping, enter payment details and place the order without leaving Facebook.
Marketplace has no built-in checkout process. Buyers and sellers have to coordinate payment and delivery separately.
Payment Processing
Facebook Shop integrates with Stripe, PayPal, DLocal and other payment providers. It handles payment processing during checkout.
For Marketplace, buyers and sellers must handle payments offline by cash, bank transfer, payment apps etc.
Commissions and Fees
Facebook does not charge any commission or transaction fees for purchases through Shops. However, the connected payment processor may have associated charges.
Facebook also does not charge commissions on Marketplace transactions. Some payment providers may have fees.
Ads and Marketing
Facebook Shop allows creating product catalog ads that drive users directly to your online storefront. Detailed targeting and retargeting options available.
Marketplace has no advertising options. Sellers have to rely on organic reach or promote through other ad channels.
Customer Communication
With Shops, merchants can chat with customers directly via Messenger before and after purchase. Useful for answering product questions and post-purchase support.
On Marketplace, communication happens over comments, Messenger or external channels. No unified interface.
| Factor | Facebook Shop | Marketplace |
|---|---|---|
| Product range | All types of new physical products | Used, handmade, small batch, local pickup/delivery |
| Target customers | Broad access to global audiences | Local buyers in your city/neighborhood |
| Seller account requirements | Facebook business page + ad account | Any Facebook user account |
| Listing and product display | Advanced catalog management and analytics | Basic listing options |
| Checkout process | Native checkout on Facebook | No built-in checkout, external coordination required |
| Payment processing | Integrates with payment providers | Offline payments required |
| Commissions and fees | No Facebook charges, payment processors may have fees | No charges by Facebook or for offline payments |
| Ads and marketing | Advanced product catalog ads | No advertising options |
| Customer communication | Unified messaging via Messenger | Fragmented communication |
Should You Use Facebook Shop or Marketplace?
Based on the comparison, here are some recommendations on when to choose Facebook Shop vs Marketplace for selling online:
Use Facebook Shop If:
- You want to launch a proper online store without building a website
- Your business has a wide appeal beyond just local buyers
- You have an existing product catalog and inventory
- You want built-in checkout and payment processing
- Leveraging Facebook ads to promote your shop makes sense
Use Facebook Marketplace If:
- You are an individual seller or small business selling used, handmade or small batch goods
- You only want to sell products locally for pickup or delivery
- You have a limited catalog size and inventory
- You don’t require integrated payments or checkout
- You want to test selling with minimal costs and account requirements
Pros and Cons
Let’s also look at some pros and cons of each platform:
Facebook Shop Pros:
- End-to-end ecommerce solution
- Access to huge buyer base on Facebook
- Built-in checkout and payments
- Robust product catalog management
- Seamless Messenger integration for customer support
- Advertising options to promote your shop
Facebook Shop Cons:
- Requires ad account and business page to set up
- Additional fees from payment processors
- Can be complicated for sellers without ecommerce experience
- May require website development skills for customization
Facebook Marketplace Pros:
- Minimal setup and account requirements
- No fees or commissions
- Tap into local buyer demand
- Easy peer-to-peer communication
- Works well for small scale or trial selling
Facebook Marketplace Cons:
- Limited product display capabilities
- No built-in payments or checkout process
- Manual order and fulfillment coordination
- No ads or promotional options
- Only reaches local buyer base
Conclusion
Facebook Shop and Marketplace cater to different business models and use cases for selling online. Shop is suitable for formal ecommerce stores selling to a global audience. Marketplace works better for informal peer-to-peer commerce on a local level.
Before choosing one platform, carefully assess your product types, inventory, fulfillment capabilities, target customer demographics and marketing goals. This will help determine whether Facebook Shop or Marketplace is a better fit to help you sell online.
If you are unsure, consider testing both to see which provides better traction for your business. Many sellers also utilize a combination of Shop, Marketplace and other sales channels for a omnichannel approach.
Facebook is making it easier than ever for businesses to leverage its platform for sales. Evaluating new commerce features like Shop and Marketplace can help unlock new revenue streams and customer bases.