Why Your Small Business Should Pass on 'F-Commerce'

by Kevin Casey on March 19, 2012
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Countless small businesses use Facebook for marketing, customer service, hiring, and other purposes. Yet many don’t operate full-fledged e-commerce stores on Facebook. That might be a good thing, one expert says.

The use of e-commerce on Facebook via third-party tools, or “F-commerce,” is pretty much what it sounds like: an online store embedded in a company’s Facebook fan page. In the truest incarnations of the concept, customers complete store purchases without ever leaving the social media site. Given Facebook’s massive user base, F-commerce would seem to offer an equally massive opportunity.

But Gordon Borrell, CEO of the market research firm Borrell Associates, warns that F-commerce may prove to be more trouble than it’s worth. “[Small businesses] can certainly enable e-commerce on their own websites as simply as they put a ‘we take MasterCard’ sticker on their storefront window,” Borrell tells the Intuit Small Business Blog. “But what we’re talking about with Facebook is the integration of marketing and commerce. I’m willing to bet that they’ll flub it.”

Some very big businesses have opened — and already closed — Facebook stores. The J.C. Penney Co. in late 2010 was the first major retailer to open a fully integrated store on its Facebook page. Other big brands, such as Gap and Nordstrom, followed. All three have since stopped selling on Facebook, and they’re not alone, Bloomberg reports. “I give so-called F-commerce an ‘F,’” a developer tells the news service. Facebook, on the other hand, declined to comment.

Can small businesses succeed where much larger companies failed? It’s unlikely, says Borrell, who believes that social networks should be reserved for marketing, advertising, and other uses. Why not? Many small businesses are ill-equipped to manage the potential downsides, such as diluting their brand with an overdose of tacky sales spiels.

F-commerce magnifies that particular pitfall, he warns. “It reminds me of Amway, when you’d have friends and neighbors inserting themselves into your personal circle and asking if you’d like to buy a refrigerator or cosmetics.”

If you are considering a Facebook store, ask yourself: How will this help my business succeed? How will it be different from my traditional online store? Will I be able to handle customer-service headaches if things go wrong? If you have good, honest answers to those questions, Godspeed. If not, it makes more sense to take a wait-and-see approach.

“I’m sure there will be a terrific cottage industry around this opportunity, but unless it’s strong and fully supported and fostered by Facebook, it will fall on its face,” Borrell says.

Kevin Casey is a business writer for Intuit and is passionate about solving small business problems.

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