What is Facebook Marketplace?
The Marketplace was introduced by Facebook in 2016 and quickly became a popular platform to sell items to local buyers. Compared to Craigslist, Facebook Marketplace is a safer and more user-friendly platform to use when selling locally.
Now, Facebook further sets itself apart from Craigslist by allowing eligible sellers to offer nationwide shipping for products in certain categories—providing them with a much larger customer base than local-only sellers.
How large? Well, Facebook itself has a whopping 2.8 billion monthly active users, with an estimated 800 million Marketplace users each month.
Because of its origins as a local buy/sell platform, people tend to think of the Marketplace as a clearinghouse for people’s used or unwanted household items. But its shipping capabilities mean it’s also great for retail arbitrage—the practice of buying in-demand products from a retail store and reselling them online at a higher price.
If you’re unfamiliar with the Marketplace, take some time to look around and see the types of products available. Like eBay or Craigslist, you can buy and sell practically anything you can think of—from cars to couches, video games, furniture, and more.
How to Sell on Facebook Marketplace: A Step-by-Step Guide
Step 1: How to set up your Facebook Marketplace account
If you already have an active Facebook account, then you have access to Facebook Marketplace. On the left-hand side of your Facebook homepage, you should see a “Marketplace” tab. If not, search for “Marketplace” in the search bar and it’ll come up.
If you don’t have a Facebook account, it’s easy to set one up. Go to Facebook.com and click on “Create New Account.”
Step 2: What should you sell on Facebook?
Similar to eBay and Craigslist, you can sell practically anything on Facebook Marketplace. Your first step to selling on Facebook is to look around your house, garage, or attic to see if you have some stuff cluttering up your home that’s valuable enough to resell.
This can include old furniture, old electronics, video games, kitchen appliances, books—anything! Take a look around the Marketplace and see what others are selling in your area.
While you’re at it, take note of other sellers’ product descriptions and photos. What did you find helpful as a potential customer, and what areas do you see for improvement? For instance, did the seller include the product’s dimensions and well-lit photos taken from multiple angles? Keep your observations in mind as you create your own listings (more on building listings in Step 4).
Categories on Facebook Marketplace:
You can sell in many different categories on the marketplace, including apparel, musical instruments, and pet supplies.
Here’s the category list in full:
Vehicles
Property rentals
Apparel
Classifieds
Electronics
Entertainment
Family
Free stuff
Garden & outdoor
Hobbies
Home goods
Home improvement supplies
Pet supplies
Sporting goods
Toys & games
Groups
Product Research
Before you start selling on Facebook Marketplace, you should do some product research to make sure what you’re selling will be profitable. This is a crucial step, especially for sellers looking to build an ecommerce business through Facebook.
Effective product research depends on data: it considers how many units of a given product sell over time and at what price, as well as how many other sellers are competing for the same customers within a particular niche.
Facebook Marketplace mostly deals in local sales of one-off items, and we don’t have a ton of helpful data on what sells and what doesn’t. But that doesn’t mean we have to guess as to what will sell—we can just look to see what works on other marketplaces like eBay and Amazon.
There are shortcuts to estimating profitability, as well as a variety of ecommerce business tools available that handle all the heavy lifting. One such tool is Jungle Scout. Its powerful features like Product Database and Keyword Scout analyze Amazon sales data to reveal profitable opportunities with just a few clicks. And while Jungle Scout’s product research tools are built for the Amazon marketplace, the insights they provide are transferable to Facebook Marketplace.
You’re not required to use software to do product research. But you should always trust data over gut feelings when it comes to selling online—it’s a science.
Let’s talk about the three main points to consider when doing product research for any ecommerce marketplace: profitability, demand, and competition.
Profitability
Unlike eBay and Amazon, you don’t have to factor in selling fees on Facebook if you are selling locally. No listing fees, no referral fees, nothing.
If you set up shipping on your listing, Facebook will only charge you a small 5% selling fee. This fee is there to cover the cost of the payment processing for using their checkout system.
For example, if you sell an item for $10, Facebook will charge you a $0.50 selling fee.
Compared to:
eBay fees: ~14% + shipping
Amazon fees: 15% referral + 15% for FBA fees
To determine your potential profit, simply subtract your buy cost from your selling price.
Demand
Since Facebook doesn’t provide us with any data, we need to use data from eBay and Amazon to give us a good idea of what’s selling.
Since we’re able to view sold and completed listings on eBay, we can calculate the sell-through rate, or the number of sold listings versus the number of active listings for a product, expressed as a percentage.
A high sell-through rate indicates strong demand—meaning a large percentage of products listed are being sold. If a product has a low sell-through rate, there’s not much demand.
So, what is a good sell-through rate? If you want to sell your products rather quickly, look for items with at least a 50% sell-through rate. Below that, you may have to wait a few weeks to a few months for the product to sell.
Using eBay’s advanced filters and search results, we can easily determine the sell-through rate of any product using data from the past 90 days.
Competition
Whether you’re selling a used couch, a car, or a product of your own creation, you’ll be competing with lots of other sellers on Facebook Marketplace.
As you can see with the Charizard card example, it’s easy for a listing to get lost in the search results. To stand out, optimize your listing with great photos and a keyword-rich description. In a later section, I’ll give you tips on how to do that.
Step 3: Where to source products to sell on Facebook
Now that you’ve got an idea of what will sell on Facebook, how do you actually get your hands on these products? In general, sourcing products for Facebook is similar to sourcing products for eBay. The best way, in my opinion, is to go the retail arbitrage route, so we’ll start with that. But there are a few other methods I want to discuss.
Resell products from retail stores
This is retail arbitrage, a business model that works well on Amazon. In fact, 19% of Amazon sellers do retail arbitrage, and over half of them make $1,000 or more each month in sales.
It also works well on eBay, so there’s no reason why you can’t succeed with it on Facebook. If there are local people in your area looking for those same products, you will have customers.
Just keep in mind that people notice drastically marked-up products, and Facebook users aren’t shy about bashing sellers who try it. It is best to price your arbitrage products reasonably and ignore these types of people. Eventually, you’ll receive messages from people looking to buy.
Search the clearance or sales sections of retail stores like Walmart, Target, and even grocery stores. More likely than not, you will find great deals to resell.
Sell your own private label product
Chances are, if you have your own private label product (i.e., a product you sell under your unique brand) Facebook Marketplace is already on your radar as a potential place to list it. 10% of Amazon sellers (who mostly run private-label businesses) currently sell on Facebook, and another 8% are looking to expand there in 2021.
If the concept of a private-label product is new to you, just know that selling your own branded products is a proven route to success on Amazon, and presents an equally good opportunity on Facebook. Remember, Facebook Marketplace has over 800 million active users nationwide—a huge pool of potential new customers.
Advantages of the private label model:
You create your own unique product and brand
You can sell something nobody else can, which sets you apart from other sellers
You can save money by sourcing your products from suppliers outside of the U.S.
Go to your local thrift store
You can always find some hidden gems at thrift stores. As they say, one man’s trash is another man’s treasure. If you look hard enough and stay consistent, you will find some hidden treasures priced way below market value.
Look out for vintage or designer clothing, used but functional video games and toys, furniture, glassware, and other items that hold their value.
Source from garage sales and estate sales
Garage sales and estate sales are places where you can find great items at an even better price. Typically, when a homeowner has one of these sales, they are trying to declutter their home or they’re moving—which means they’ll let stuff go for cheap.
They can be hit or miss but if you stay consistent, you can dig up gold. Use these two free websites to find garage sales and estate sales in your local area
Estatesales.net
Garagesalefinder.com
Step 4: How to list your items
Now that we’ve reviewed product research and sourcing, lets go over how to create your listings and start making some money.
Facebook makes it easy to list products for sale. We’ll do it from a desktop in this example, but know that you can also list products from your phone.
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