Facebook Marketplace vs. the Competition for E-Commerce Businesses

What is Facebook Marketplace?

Facebook Marketplace describes itself as “an e-commerce platform that connects sellers and buyers through meaningful interactions and unique goods.” Its core strengths are its “free to use” price tag and its national and local reach and integration with Facebook Messenger, through which buyers and sellers can arrange for pickup, ask questions or negotiate on price.

Each sale on Facebook Marketplace is connected to a Facebook account, giving buyers and sellers — of products as diverse as furniture, vehicles and restaurant supplies — a level of safety by providing some background information on the person they are considering doing business with. 

What are other online marketplaces?

Some sellers may be better off with a Facebook Marketplace alternative, whether that’s because they don’t have a Facebook account, they want to get in front of a larger audience or they’re targeting a more niche group of buyers. Here are popular competitors that can add to a business’s e-commerce reach. 

Craigslist

In the early 2000s, Craigslist changed the classified newspaper ad game forever. The site arrived online at a time when more and more people were exploring the internet from their homes and businesses to purchase goods. Its signature format relies on minimal, online text-based listings to provide a consistently accessible combination of form and function. 

There are few barriers to entry for Craigslist buyers or sellers. There are no fees — all you need is an email address, basic product information and a few photos of the item for sale to reach Craigslist’s legions of eyeballs searching through distinct categories in niche geographical regions.

Unlike Facebook Marketplace, Craigslist functions with more anonymity. The seller chooses how much information to include, so a buyer may know very little about the person or business behind the product. This lack of transparency has inspired more local marketplace competition. Mercari, NextDoor and OfferUp have all launched local markets to lessen the fear of the unknown for online buyers and sellers.

However, depending on your product category and buyer’s demographics, anonymity may have little to no impact on your sales. Hardware, raw materials, industrial products and equipment sales are less likely to be negatively impacted by Craigslist’s anonymous approach, while buyers of home goods, appliances, clothing and toys often prefer knowing more information about the seller.

Amazon Marketplace

Known for its vast variety of products for sale, Amazon Marketplace gives small businesses — aka third-party sellers — the opportunity to sell their products where their customers are already shopping. When you sell on Amazon Marketplace, you can even create a virtual store that houses your brand on the platform. [Learn how Amazon Stores can help your business.]

Amazon’s Professional Selling plan comes with policies and expectations that go well beyond those of an anonymous Craigslist seller or a family friend on Facebook. In addition to charging a seller fee of $39.99 per month, Amazon maintains standards for product quality. Products with commonly understood quality standards, like textbooks, kitchen tools, pre-owned electronics, video games and brand-name clothing, are most likely to sell on Amazon. 

eBay

eBay brought auction house sales to the masses, applying a bidding process more closely associated with livestock and fine art to everyday items needed in homes and small businesses. As its business has evolved, eBay has built a marketplace to facilitate buying and selling transactions in addition to its auction house roots. 

Its marketplace makes it a direct competitor to Facebook Marketplace, Craigslist, Amazon Marketplace and smaller niche marketplaces. eBay separates personal, occasional sellers from high-volume sellers. Like Amazon, the site reaches a worldwide audience of consumers and is less attractive to buyers seeking local sales and products. 

Etsy

Started in 2005 as an online community for artists, crafters and vintage fans, Etsy has matured and evolved into a multivendor e-commerce marketplace. The site is filled with artistic, unique and original handmade and vintage items sold by makers, creators and small business owners. [See online sales alternatives to Etsy.] 

Unlike the miscellaneous nature of the items for sale on Facebook Marketplace, Craigslist, eBay and Amazon Marketplace, Etsy’s sellers often focus on artistic home decor, art, clothing, jewelry, accessories, furniture, toys and unique vintage finds. Sellers pay listing costs for each item in their online store. Business branding and curation are encouraged to create a unique and personalized experience for the shopper — the opposite of the shopping experience on the anonymous Craiglist and the often informal Facebook Marketplace.

Amid the ongoing success of clothing and accessory sales on the heavy-hitter “miscellaneous” product marketplaces, competitors specializing in fashion have entered the playing field. Poshmark (resale), Depop (Gen Z sustainable fashion) and TheRealReal (authenticated designer merchandise) offer fashion fans a curated and branded online shopping experience that Facebook Marketplace, Craigslist and eBay can’t — or don’t want — to compete with. 

Gazelle and Swappa

While most marketplaces will gladly list your technology for sale, if you intend to sell smartphones, tablets, laptops, video games or other tech products, consider the specialized marketplaces Gazelle and Swappa or similar online platforms like uSell and Decluttr.

Gazelle, which describes itself as a “reCommerce company,” lets you trade in used electronics for cash. It purchases used smartphones, tablets, laptops and desktops, which it inspects, certifies and resells. Gazelle ecoATM kiosks, located in malls and retailers, are automated machines that let you sell unwanted tablets and smartphones and receive cash on the spot. Payment comes in the form of a check, Amazon gift card or PayPal transfer.

Swappa is a community market that directly links buyers and sellers. Inventory typically includes virtual reality (VR) headsets, smartwatches and home tech. One particularly noteworthy aspect is that Swappa’s fee structure is built into the price of the item — it is paid by the buyer upon purchase. eBay and Etsy, on the other hand, charge transaction fees to the seller. 

What are the pros and cons of using Facebook Marketplace?

Facebook Marketplace offers a lot of benefits in the online selling space. But should you put all your eggs in this basket? There are several upsides and downsides to weigh. 

Pros of using only Facebook Marketplace

• There is a steady base of potential customers — Facebook Marketplace had 1 billion monthly visitors in 2021, according to Statista.
• It’s “stickier” than other platforms because users have multiple reasons to log in multiple times a day or week.
• The built-in Messenger tool provides buyers a safe means to communicate with sellers without giving personal contact information. 
• You can save money since it’s a free-to-list platform.
• To save time when learning how to sell and promote, you can focus on only one marketplace to start with.

Cons of using only Facebook Marketplace

• It isn’t a vertical marketplace geared toward a particular niche; there are hundreds of product categories, which can overwhelm consumers.
• You may not find a large buyer pool for your product.
• Because there are so many buyers and product categories, your item may get lost in the shuffle.
• It may take longer to sell your items since there isn’t a highly specific, targeted audience. 
• It’s harder to separate your business and personal life if your sales are connected to your personal Facebook account (with photos of your dogs, kids and vacations).

Facebook Marketplace and the competition

As any successful small business owner and strategic seller knows, every decision has pros and cons because no single decision fits every situation. The same is true with online marketplaces — no marketplace is the best fit for every product or every company. By applying the “4 Ps” framework of focusing on place, product, price and promotion, you can identify the right online marketplace — or marketplaces — for your product, its price point and the kind of promotion you know is most effective. 

Consider the advantages and disadvantages before committing to a particular marketplace. Hard-to-sell items benefit from listings on multiple platforms, getting exposure to multiple sets of consumers and people who may be searching for your specific item on only one site. Try starting with Facebook Marketplace. Then, depending on your item, branch out to local options like Craigslist. After that, if applicable, try global venues like Amazon, Etsy and eBay. Whichever service you use, make sure you’re familiar with these online business laws.

Jackie Dove contributed to this article.