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Facebook Marketplace and what it means for businesses like TradeMe and Ebay

By February 23, 2018Business, Facebook, Social Media

Marketplace was rolled out in October 2016, as a second attempt following the unsuccessful trial of 2007. Pushed by Deb Liu, the site has taken off, with membership tripling over 2017. Marketplace now occupies a place of honour on the bottom bar of the Facebook app, a space formerly occupied by Messenger. The site is organised in a way similar to Craigslist, categorising items by their location and description. Theoretically, this enables a simpler, faster trading experience for both the sellers and the buyers. Marketplace has become so appealing due to the fact that it does not charge fees for listing items, as well as because of the comparatively higher speed of uploading items. In a few clicks, the item is up for sale and being viewed by thousands of people in the area. But is Marketplace replacing Ebay and TradeMe as the new heart of second-hand oriented e-commerce?

Although Marketplace may be appealing to both sellers and buyers, it offers no protections to either. There is an element of trust which Marketplace relies on, as in case of a product being sold under false pretences, the buyer will not be refunded and the seller simply banned from using Marketplace on their account again.

Marketplace’s lack of rigid regulations is both its greatest drawcard and its biggest disadvantage. As more and more people turn to the platform, the number of robberies, fakes, and “Seller Warning” pages appear. While Facebook can boast higher traffic, Ebay and TradeMe retain their appeal to those buying or selling ‘high risk’, expensive items. In all likelihood, these sites will lose only a small fraction of their audience. This prediction is based upon the assumption that the comparatively long, slow process of listing items on TradeMe discourages the sales of cheap, miscellaneous items. In order to invest time into selling a product, the seller must be expecting a significant return from it. On Marketplace, however, listing a mug takes the same amount of time as listing a television, which results in a significantly larger proportion of cheap, small items, compared to TradeMe or Ebay. Those seeking to sell or buy items of high value will still turn to TradeMe and Ebay, as the advantage of having protections and guarantees continues outweighing the disadvantages of time investment and fees.

Marketplace also encourages negotiations and direct contact between the buyer and the seller, as all sales are arranged via Messenger, with no ability to purchase an item or even know whether it is available without first contacting the seller. Compared to TradeMe, where no such contact is needed and availability is indicated by the item’s existence on the site, Marketplace’s set-up appears to be inefficient. For sellers, the ability to be directly contacted results in many people offering prices drastically lower than the listing price, uncertain potential buyers, and offers with no intention of follow-through. And for buyers, the seller’s lack of motivation to mark their listings as sold results in a multitude of inquiries after items which are unavailable.

Although news outlets were quick to dub Marketplace the ‘Ebay killer’, the site is clearly not wholly superior to its older counterparts. The rise in the numbers of people using Marketplace is not an indication of the fall of the number of people using Ebay or TradeMe, but rather an indication of more people participating in e-commerce overall. Ebay and TradeMe can seem daunting to someone who has never participated in e-commerce, as they require an account to both buy and sell, and an initial investment of fees in order to sell. So, if someone young and not well acquainted with e-commerce wanted to sell some items in order to, say, move to a new house, they would likely not turn to these sites because of the amount of time it would take to create an account, or because the initial investment was higher than the expected return. Marketplace takes these people, who in all likelihood already have a Facebook account, and offers them the option of listing their items within a few seconds with no fees. If TradeMe and Ebay are the equivalent of taking your items to a second-hand store which sells on your behalf, Marketplace is the equivalent of a garage sale. So rather than thinking of Marketplace as a replacement for TradeMe and Ebay, it is more accurate to think of it as an accompaniment to them. Marketplace does an excellent job of fulfilling its purpose: making buying and selling quick and easy for people inexperienced with e-commerce or selling low value items. Unless significant changes are rolled out, Marketplace will remain an accompaniment and could potentially even encourage people to use TradeMe and Ebay as they become more confident with e-commerce and move onto other sites.