Is Facebook Marketplace siphoning buyers from Amazon?

08 Jan 2017

Are services like Facebook Marketplace siphoning away buyers who might otherwise shop on Amazon.com? Forbes magazine wonders.

In an article with the provocative title “The Surprising Reasons Why 22 Million Households Opted not to Buy on Amazon in 2016,” Forbes writer Tom Popomaronis cites a Wall Street Journal piece stating that some 22 million U.S. households didn’t purchase a single item off Amazon’s site in 2016 – or about 17 percent of primary household shoppers.

The Journal article cites several reasons why shoppers may steer clear of Amazon – difficulty in receiving packages, easy access to goods near home, a preference to browse in a brick and mortar store, and lack of Internet access or mistrust of the Web.

Popomaronis then adds:

As people search for low prices, businesses – both giants and startups – are creating or adding new shopping alternatives. For example, Facebook Marketplace has been picking up steam, letting people find others who are selling items they want nearby. … Amazon’s not just competing with major retailers anymore – they’re competing with the average individual.”

We’re not sure there’s a direct correlation between Amazon’s missing “22 million” and the relatively new Facebook Marketplace. But Popomaronis makes a good point.

Companies don’t necessarily have to become like Amazon to do well. They might just need to be what Amazon isn’t.

As Facebook Marketplace evolves, will it compete primarily against other general classified apps like OfferUp and Letgo, and desktop sites like Craigslist and Kijiji, or will it aim to take market share from decidedly non-classified Internet retailers like Amazon and EBay?

Or maybe both?

While Marketplace was built to be purely peer-to-peer, as we reported previously, the lines are already starting to blur with links to third party retailers creeping in.

Facebook Marketplace could embrace that. What would it be then?

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Brian Blum

Brian Blum covers the U.S., Canada and Israel for Classified Intelligence Report, and contributes to our special reports and research projects. Originally from San Francisco and now based in Jerusalem, he has been with the AIM Group since 2004. He is the president of Blum Interactive Media, specializing in writing and multimedia content development for online, print, video and audio. His clients include newspapers, universities and non-profits. He is currently working on a book about the billion-dollar bankruptcy of a once high-flying Israeli startup.