Tuesday, July 13, 2010

Shopping Cart Applications on Facebook...too much or just right?

In the Wall Street Journal Article "Merchants Push Sales Through Social Media; Early Adopters Add Shopping-Cart Apps to Fan Pages to Sell Items, Services" by Sarah Needleman details how merchants are using their Facebook and MySpace pages to attract purchases through offering sales and services to their fans. Fans will be able to see items for sale on the social media pages and then be directed to the company's website to purchase the items. This increases traffic for the company's main website, as well as gives incentives for people to become fans of different company's pages to receive special deals. Though sales through social media seem to be a great idea for many companies, it is more effective for company's who already have a large fan base. For companies who don't have many fans, they would have to combine marketing for their page and their sales as well to see any true profits. As seen with the article the company, Guitar Syndicate has seen an increase of 17% since their online social media sales offering has been offered, but in the same instance Sun & Ski Sports has only seen social media sales offering 1% to their online sales. There also is a fee for adding shopping cart applications, starting at $24.99 but with the possibility to increase if more items are being offered for sale. This is new territory that is being incorporated with social media sites and it is intriguing to see how consumers are and will react to it.

Adding shopping cart applications to social media sites is an intriguing topic because it seems to be one of the few untapped markets within social media. Now with it being offered by companies, there can be a mixture of excitement and also wary. Companies can be willing to add the applications since it can mean more traffic onto their actual website, as well as their social media page. But, as noted before, companies have to make sure that they already have enough fans to be profitable. Therefore, adding a shopping cart application could mean increased marketing henceforth increased costs the companies have to face. There is also the fee of adding a shopping cart application as well as Face book stating that they are going to have a 30% share of sales for various virtual goods. Companies, especially ones on a smaller scale, are going to have to weigh the pro and cons of adding this application. It could lead to greater online sales and fan traffic on their pages, but it could also mean financial headaches...

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