Facebook for Profits - Three New e-Commerce Apps

 

March 14, 2008

This week in e-commerce news Facebook is front-and-center, with two companies announcing plans to introduce buying-and-selling applications for the social networking site.

This follows the announcement by Ben Ling, Facebook's director of platform product marketing, last week at a conference  to "provide developers native support for accepting credit cards to help them monetize their applications," to be available later this year.
Meanwhile, bSocial Networks, Inc. yesterday released Market Lodge 2.0, an applicati

on that lets members customize their own stores, selecting from more than 1,200 products sold by about 50 different merchants.
To participate as a vendor, visit this page for details. There is, however, a fairly steep commission. The Market Lodge site states: "We are currently asking vendors for a 35 percent commission on each sale. That is 35 percent off of your retail pricing. Ten percent of this goes directly to the social network member for their participation in creating a new sales channel for your products. And, we are opening a tremendous sales channel with no expense. Unlike other sales channels you are able to reach millions of targeted customers at no cost." (To be specific, Facebook currently has about 67 million members.)
This is how it works: Facebook members can create online stores within their profiles in less than five minutes, according to the company. Then, they can recommend products to their friends and social network. If a product is purchased, the Market Lodge user receives a 10-percent commission on the retail price.

Unlike eBay, Amazon and other online marketplaces, Market Lodge users do not have to maintain any inventory, the company says. Rather, participating Market Lodge vendors and bSocial Networks directly handle all back-end transactions such as shipping, payment processing and customer service.

"Until now, social networks have used online advertising as their primary revenue stream," Sue Spielman, co-founder of bSocial Networks, said in a statement. "The next step in eCommerce is to expand the social bond of trust inherent in social networks into the actual sale of products. Market Lodge represents a radical, and much needed shift in the way business and commerce are integrated within social networks."

Currently, Facebookers can choose from more than 1,200 products to recommend and sell through their own personal Market Lodge. Existing product categories include health/wellness, entertainment, fashion, books, sports, food/beverage, pets and self-improvement.
Additionally, Facebook members can recommend vendors or sign up to become vendors themselves. "One of the significant aspects of our application is the potential for small companies, even individuals, to sell their products through Facebook and other social sites," said Bill Eager, co-founder of bSocial in statement.

Market Lodge is one of about 16,000 applications available for use at the site, with most being mini-applications, or widgets, that let members play games, share photos and such. Both Facebook and Google's MySpace have millions of members, and both are still trying to figure out how exactly to make money off the social networking sites through third-party e-commerce applications.

Heard it through the Grapevine: Amazon Giveth, Too
Apparently, the momentum of the effort is building as other big players such as Amazon enter the Facebook fray. The company yesterday announced two Facebook applications — Amazon Giver and Amazon Grapevine — allowing members to see and purchase what their friends want through their Amazon Wish Lists, as well as recent public activity on Amazon.
At press time, Giver and Grapevine had 594 and 290 users signed up respectively.

Amazon Giver allows members to see what their friends on Facebook have on their Amazon Wish Lists. They then can choose to purchase a gift for them from Amazon.com through the application, or view suggested items based on interests they have listed on their Facebook profile, according to the company's statement. Meanwhile, Amazon Grapevine allows members to see friends' activity on Amazon.com, such as when they update their Wish List, write a review or tag a product, through news feed updates.
Both Amazon Giver and Amazon Grapevine share only the information with Facebook users' friends that each user has affirmatively chosen to share via an opt-in mechanism, according to Amazon.

The company explained how Giver works: By adding the Amazon Giver application to their profile, Facebook members can choose to view products from friends' Amazon Wish Lists, or recommendations based on what any friend has listed as likes and interests on their Facebook profile. When a user decides to purchase something for a friend, they are directed to a secure Amazon.com checkout page.
During checkout, the shopper can choose a payment method and a shipping address. If he or she buys a gift off of a friend's Amazon Wish List, they can ship it directly to the recipient without entering their address because the friend has also registered a recognized Amazon.com account when they added the application to their page. In order to view friends' Wish Lists, all users must set their Wish Lists to "public" on Amazon.com. Any Wish Lists set as "private" will not be displayed.

Using Grapevine, you can share what you've been doing on Amazon.com with your Facebook friends through Facebook's News Feed. For example, if Facebookers with the Amazon Grapevine application update their Wish Lists, write reviews or tag  products, their friends will see what they've done as an update in their News Feed. Facebookers can choose what type of activity they would like to share with their friends, as activity updates are entirely opt-in.

It's too soon to tell if social networking and shopping is a marketing mix that will make money, but clearly the industry is moving forward with the notion. It will be interesting to see what — and who — will be successful in terms of making money on the social shopping trend. And, as Facebook opens up to credit-card applications in the near future, it's a sure bet everyone will be trying.

 

 

 

source: ecommerce-guide.com