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Why Set Up Facebook Shops, for Small Businesses

Person visiting a Facebook Shops shop

Facebook has had its PR ups and downs, but it’s still the top social media platform for keeping in touch. So, if you want to sell anything online without building your own website, setting up a Facebook Shops store is a pretty good choice. After all, a vast number of folks already have Facebook accounts. For them, keeping your business in mind for future purchases would be as easy as hitting the Follow button.

Note we’re not saying Facebook is great because you can advertise to all its users—although you can do that too, if you wish. Most small businesses start by selling to friends and family and friends of friends and family. And Facebook is one of the most convenient ways for word-of-mouth customers to find and buy from you.

So, let’s take a look at the details of setting up a shop on Facebook.

Small Businesses can Sell on Facebook in Three Ways

There are three places you can sell items on Facebook:

  • Facebook Marketplace
  • Facebook Page shops
  • Facebook Shops

Facebook Marketplace is similar to eBay or Craigslist. You can find folks who want to sell their own used items or you can find businesses selling new products.

Facebook Page shops are shops set up on a Facebook Page. Typically, it’s just a business account where businesses post news about their products. To buy an item, you click on a linked page that takes you off Facebook and to the business’s website.

Facebook Shops is, basically, a webstore on Facebook. Businesses set up Facebook Shops to offer one or more items for sale. Shops is meant to offer a uniform storefront across several of Meta’s properties: Facebook Marketplace, Facebook Page, and Instagram.

With Facebook Shops, you can link your own website to the Shop and take orders from your website. Or you can sign up for Facebook’s checkout service and run your Shop as your only online store. Businesses that have a Page can convert their Page to a Shop at any time.

Because Facebook Shops offers the broadest and easiest shopping experience across multiple Meta services, this article will focus on Shops instead of Page or individual Marketplace listings.

What Conveniences does Facebook Shops Offer?

With Facebook Shops, you can set up a fully-functional webstore and offer items for sale to Facebook and Instagram users. You can easily showcase your entire line of products on your Shop. Facebook can also help you with taking payments, calculating and paying sales taxes, and shipping.

We’ll discuss each in more detail below.

You Can Upload Your Entire Product Line as a Catalogue

Most businesses sell a variety of closely-related products. For example, if you sell scones, you can sell blueberry scones, cranberry scones, or just plain scones. If you sell hand-knitted clothing, you might have sweaters, mittens, or hats in your product lineup.

You can upload your entire catalog to your Shop, so a potential customer can see everything at once. Your product catalog should:

  • Have at least one photo per product
  • Be in JPEG or PNG format
  • Have a file size of 8 MB or less

Look here for additional details and best practices.

As to where to get the product photos, you can, of course, hire a professional photographer. But you can also do it yourself. It’s not very hard or expensive. Take a look at our series on DIY product photography to learn how to take near-pro quality product photos.

You Can Process Payments Through Facebook Shops

Traditionally, folks who bought and sold on Facebook arranged for their own methods of payment. But, with Shops, Facebook is offering a checkout service that allows businesses to take payments through Facebook.

Note, though, that Facebook isn’t your payment processor. They use third party companies, and these companies will appear as the merchant of record for purchases of your items. However, according to Facebook, your customers will see your business’s name on their bank statements, so there shouldn’t be any confusion for your customers.

Facebook does charge a fee for its payment processing services. As of this writing, the fee is 5% per shipment or a flat rate of $0.40 for shipments of $8.00 or less. Additionally, the fee:

  • Is calculated after taxes have been added
  • Includes payment processing fee
  • Includes a Facebook administration fee

As of this writing, Facebook is waiving the processing fee until June 30, 2022.

To be paid, you must connect a bank account to Facebook’s Commerce Manager. You’ll receive your payment within 30 days after you ship the product. If your customer disputes the charge, Facebook will hold the payout until the dispute is resolved.

Facebook Will Collect and Remit Local Taxes for You

One of the very complicated issues with selling online in the US is that the local governments of your customers typically will collect a sales tax for every purchase. Naturally, the local tax rates vary. Having to keep track of where you sold to and how much taxes you collected as well as remembering to send the taxes to the right place can be overwhelming for a small business.

Happily, Facebook’s checkout service will take care of all this for you. Just make sure you’ve entered your tax and business address(es) correctly, so you don’t run into problems later.

You can Use Your Own Shipper or Use Facebook’s Preferred Shippers

After a customer buys a product from you, you must ship the product within 3 days of the order. You can either arrange for your own shipper, or you can use Facebook’s current preferred shippers USPS and UPS.

If you ship yourself, Facebook requires the shipper to offer tracking and delivery confirmation. If you use Facebook’s shippers, you can print a shipping label from the Commerce Manager and track the shipping that way.

When a customer places an order, there’s a hold on the order to prevent buyer’s remorse and to detect fraud. This usually lasts for 30 minutes but can be up to 24 hours. Once the hold is removed, you can fill the order.

For more information on shipping, see this Facebook information page.

You Have to Provide Your Own Customer Service

As a part of providing a smooth shopping experience, Facebook requires you to provide your own customer service. You must respond to customer inquiries about shipping within two business days.

Facebook also provides a reviews/ratings function for your Facebook Shop. This is another avenue you can provide customer service, in case of complaints.

There are Certain Items You Can’t Sell on Facebook Shops

Like most e-commerce platforms, Facebook won’t let businesses in some industries set up shop. One reason is that many platforms simply don’t want to deal with the complicated laws related to certain industries (e.g. prescription drug sales).

Another reason is that credit card processing companies often don’t want to do business with “high risk” industries where there’s a high percentage of fraud or buyer’s regret (e.g. online gambling). So, if the platform can’t take payments for you, then they probably won’t do business with you.

Facebook lists products and services you can’t sell on Facebook Shops. You can find the full list here. Some examples include:

  • Adult oriented products and services
  • Alcohol
  • Documents, currency, financial instruments, virtual currency
  • Online gambling
  • Supplements
  • Medical or healthcare products or services (e.g. healthcare devices, smoking cessation products that includes nicotine)
  • Prescription drugs, drugs, or drug paraphernalia
  • Subscriptions and digital products
  • Tobacco and related paraphernalia
  • Weapons, ammunition, and explosives

We know that CBD-related products are popular right now. While Facebook does not explicitly prohibit CBDs, they probably fall under supplements, drugs, or tobacco-related paraphernalia. Most payment processors think of CBD as high risk, so Facebook probably will also categorize it as such. So, it is unlikely that you’ll be allowed to sell CBDs on Facebook Shops.

Facebook Shops Can be the Right Place for a Small Business to Sell Without a Lot of Upfront Investment

Most successful businesses aren’t built in a day. They often start small, struggle for a while, before finding their niche to make real money. To get to the making real money part, you have to be careful with your startup money so they last you past the struggling stage.

This is why, instead of spending thousands of dollars to hire a professional to build a standalone webstore, we recommend you start on an e-commerce platform first. You can often set up a shop for free and start selling very quickly.

We think Facebook Shops is one of those platforms where you can build your fledgling business. One huge advantage Facebook has over other e-commerce platforms is that many people already have a Facebook account. Once they hear about your product, they can find you quickly.

After you become successful, you can always build your own webstore off Facebook. But, meanwhile, you can bypass a lot of the time, expense, and learning curve of setting up such a webstore and focus on getting your product out to the world.

But, if you don’t like Facebook, you have alternatives. We take a look at eBay next.

Interested in starting and running a small business? Here’s the beginning of our step-by-step guide: What to do right after getting that great business idea.

Questions? Comments?