Can You Use Business Loans to Run Your Facebook Marketplace?
August 30, 2022 | Last Updated on: August 30, 2022
August 30, 2022 | Last Updated on: August 30, 2022
In this article:
The days of running a business by posting items in your neighborhoodâ€™s buy and sell Facebook groups are over. The latest way to use Facebook to drive sales is by utilizing Facebook Marketplace. This social media interface, designed to help individuals buy and sell household items, has created a unique opportunity for small business owners wishing to grow their companies. Facebook Marketplace is a feature within the app that offers a shop-like site, similar to eBay or Craigslist. The social media site doesnâ€™t facilitate sales, but it provides a platform for sellers to advertise, price, and coordinate shipping for their products.
Listing items or advertising your small business on Facebook Marketplace allows small business owners to connect directly with potential customers. The site can be used to list a variety of retail products or simply to advertise a local storefront. It costs nothing for people to shop on Facebook, so Marketplace can act as a vehicle for getting your brand in front of your target customer base. Unlike Amazon and eBay, Facebook allows small business owners to list their items or advertise their services for free. The business simply pays selling fees after the item has been shipped, typically 5% of the product price.
Some other advantages of using Facebook Marketplace for your small business include:
Around 35% of the worldâ€™s population uses Facebook and Facebook Marketplace, which equals about 2.9 billion users each month. The popularity of Facebook all over the world means that entrepreneurs that choose Marketplace as a sales platform, have instant access to a large international audience.
Using Facebook Marketplace as a tool to grow a small business gives the user access to different marketing tools to reach their target audience through the platform, like the merchant selling feature. Using these marketing tools helps your message reach more people, which can translate to more revenue. There are also marketing tools like Facebook Ads, Sendinblue, and Hootsuite that are designed specifically for eCommerce businesses connecting through Facebook.
Small business owners that choose Facebook Marketplace as a sales platform do not have to worry about a separate source for collecting credit card payments. Since Marketplace doesnâ€™t have a preferred transaction service, businesses are free to accept any payment method including PayPal, Shopify, BigCommerce payment processing, direct bank transfers, or cash.
Selling your small businessâ€™s goods and services on Marketplace lets the business owner communicate directly with customers and potential buyers. The personalized platform allows the entrepreneur to control the information that is reaching the public and connect with new customers by using search engine optimization (SEO) keywords on their page. Each visitor or commenter on Marketplace is considered a future customer.
Small business owners that operate a Shopify or BigCommerce store are the most frequent business users of Facebook Marketplace. However, starting to sell items on Facebook requires a slightly different process than the one necessary for individual users engaging in peer-to-peer sales. Weâ€™ve broken down some of the main steps required to use Marketplace for your business in this section.
Familiarize yourself with Facebookâ€™s policies on what products you can sell, which products you cannot sell, and other policies set by the social media company. Facebook, and its parent company Meta, has a lot of information available for free on its website to help business owners use the platform.
Facebookâ€™s merchant policies are available to guide merchants on how to use Marketplace. They list rules and tips about using the checkout feature on Marketplace to fulfill and ship orders. The merchant policies explain what kind of support is expected of the merchant and also of Facebook after a purchase has been made. The merchant policies also address communication guidelines to help businesses more effectively reach their buyers.
Facebook Marketplace also publishes commerce policies that talk more about what is and isnâ€™t allowed on the platform, including the types of products and services you are allowed to sell. The commerce policies provide a complete list of items prohibited from being sold on Facebook, which includes alcohol, adult items, animals, healthcare, recalled items, and more. The commerce policies also remind sellers that they are responsible for learning and following all applicable federal, state, and local laws and regulations.
The commerce product merchant agreement included in Marketplaceâ€™s policies lists rules that apply when products or services are sold, leased, or traded using any Marketplace listing, Facebook page, or other Facebook-owned social media platforms. These rules apply to both businesses and individual sellers.
The purchase protection policies were created to reassure customers that the platform is a safe place to do business. For Facebook users that pay with Facebook checkout, their purchase and their bank account are fully protected, and they can get a refund if they are not satisfied with their purchase. For business owners that sell products on Facebook, they should read through the terms of the protection policies and keep them in mind when guaranteeing a positive experience to the customer.
The community standards were created for everyone from casual content surfers to folks conducting the majority of their business on the platform. The guidelines include policies about the ownership of photos, new products, and brands sold as well as some messages about maintaining an inclusive environment.
Facebook Marketplace is a great tool for small business owners that are looking to boost sales, expand, get started, or build a loyal customer base. However, the platform is great because so many people like and trust Facebook. To remain eligible to conduct business or advertise on Marketplace it is important to comply with their guidelines. Along with reading the policies, weâ€™ve compiled these other great tips for finding success on Facebook.
Stay on top of your product. If you are running low on an item, make sure that is indicated in your Marketplace store. If customers pay for items that you donâ€™t have in stock, they are likely to leave a bad review for your business which can negatively impact future sales.
Properly updating a customerâ€™s order as sent can increase customer satisfaction and save you from a lot of time-consuming messages. When youâ€™ve sent a purchased item, mark the item as â€śshipped.â€ť
Customers prefer to shop with businesses that provide tracking numbers so the buyer can see where their item is at in the delivery process and know when to expect the package, so sending a notification that includes the tracking number helps keep customers happy. Tracking numbers also protect the merchant from customers making false claims that their product was not received.
Facebook states in its eCommerce policies that all orders should be shipped within three business days of receiving payment. That shipping time should allow most products to be received by the customer within seven days of ordering. Be sure to update customers of any unexpected delivery delays.
Communication is key. While no one is expected to respond to customers in real-time, Facebookâ€™s policies recommend responding to every customer that contacts you via the Marketplace page or Facebook Messenger within 2 days. Listing your personal phone number on your Marketplace business page is not recommended.
To do business on Facebook, it is required that merchants accept returns for any item in new and unused condition within 30 days of the purchase date. Follow the return policy along with other merchant policies to continue to have access to your Facebook account.
Many entrepreneurs donâ€™t realize that they have financing options available for their Facebook business page. The truth is there are many loan options for Facebook entrepreneurs and other E-Commerce businesses. If youâ€™re not sure a small business loan can help you grow your Facebook business, check out these common reasons to explore business financing for eCommerce stores.
There are many different types of financing options for Facebook Marketplace entrepreneurs. Deciding which loan or other funding option is best for you depends on your lender preference, creditworthiness, and business needs. Term loans and SBA loans seem to be the most popular with small business owners operating on Facebook, LinkedIn, eBay, and other eCommerce platforms because of their flexible repayment terms. Other financing options that work well for Facebook entrepreneurs are a business line of credit, working capital loan, or merchant cash advance.
Term loans are the most common type of financing used for eCommerce businesses. A term loan gives approved borrowers a lump sum of money upfront. The repayment terms typically require monthly payments and are predetermined and provided to the borrower before funding is complete. With a term loan, the borrower can expect either a fixed or variable interest rate. With a variable interest rate, the interest portion of the monthly payment will fluctuate and is determined by the market rate. Fixed interest rates remain the same for the life of the loan.
To get approved for a term loan, lenders evaluate your creditworthiness using your businessâ€™s financial reports, your business credit history, and your personal credit score. New borrowers with unestablished credit or bad credit scores may qualify for a term loan using a larger down payment, personal guarantee, cosigner, or personal asset as collateral.
SBA loans offer lower down payment requirements and better interest rates than other loans because the loan programs are backed by the U.S. Small Business Association. The SBA will guarantee up to 85% of loans issued by an approved lender. With an SBA loan, payments are made to the lender each month and rarely have prepayment penalties, so they are great for large purchases like equipment or real estate.
While many eCommerce business owners consider SBA loans to be the best financing option for ventures like Facebook Marketplace, they have disadvantages as well. Marketplace sellers typically need access to fast funding, and the application for SBA loans is one of the lengthier financing processes. The eligibility requirements and application process are also stricter in comparison to other loans, with some SBA loan programs requiring a minimum of two years in business.
Starting your own business can be a scary process, but itâ€™s not one you have to go through alone. The loan providers at Biz2Credit have experience working with small business owners in every industry from eCommerce to used cars. Give us a call today to see how a small business loan can help you scale your Facebook Marketplace business or check out Danny Starâ€™s incredible story about how a working capital loan through Biz2Credit helped him take his website business to the next level.
September 26, 2022
September 23, 2022
September 21, 2022