Would you shop on Facebook?

Many businesses in varying industries have discovered how valuable it is to establish a presence for their brand on online social media sites. Such sites are valuable tools to establish relationships with customers, and stay on the forefront of consumers’ minds so they will be more likely to choose you to fill their needs. After finding much success in this area, some companies are taking the next step and using those profiles to sell directly to their followers.

Merchants on Facebook and MySpace are now adding e-commerce stores to their fan pages, hoping users will scan lists of for-sale items and services—such as floral bouquets, hand-crafted jewelry and spa treatments—and click a button to add them to online shopping carts. This is done by adding sales applications to your corporate profile. So far, sites such as Twitter and LinkedIn have not opted to include such applications.

As of now, companies who have adopted this method have seen modest results, but have found a direct correlation between the number of loyal followers and number of online sales. There is an initial investment of running ads for your page and/or running contests to promote your site, but you have to spend a little money to make people know your page exists and inform them of what it has to offer. A fan page that doesn’t receive much traffic may give the impression that it is not popular, and many people don’t want to shop where no one else shops.

One consideration for incorporating a shopping application onto your page is to make sure the level of customer service is even higher than in a physical store, because disgruntled customers can blast their frustrations to their social media networks. Also, it remains to be seen whether people will feel comfortable entering their personal credit card information into a social media site, or feel wary of having their purchase advertised on other people’s news feeds.

Entrepreneurs looking to tap into the trend should also expect to pay a fee for applications that provide shopping carts. For instance, the CoreCommerce application charges a fee starting at $24.99 a month, based on the number of products a company wants to list for sale. Neither Facebook or MySpace charges merchants fees for hosting the stores or a commission on sales, however Facebook recently announced it will take a 30% cut of sales of credits for certain virtual goods. (Smartbrief Article: “Merchants Push Sales Through Social Media” by Sarah Needleman)

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