For some, it's surprising; for others, not so much. Facebook Marketplace (NASDAQ: META) is now a genuine contender to eBay (NASDAQ: EBAY), Amazon (NASDAQ: AMZN), Craigslist, and other online marketplaces and e-commerce sites. It has been for quite some time.
According to Fortune, Marketplace had more than 15 times more monthly active users (MAUs) than Craigslist in 2017 - 800 million versus 55 million. According to a report from Capital One Shopping, that rose to 1.2 billion today. On the other hand, the e-commerce giant Amazon had 310 million monthly users in 2023, and eBay had 132 million active buyers worldwide. Regarding active users, Zuckerberg's Marketplace undoubtedly overshadows them as it has experienced rapid growth and now has tremendous reach.
History
Launched in 2016, it has become a key player in the online marketplace industry, offering a user-friendly platform integrated into the widely-used Facebook app. This integration has provided convenience and accessibility since its inception, making it easier for users to buy and sell items within their social network. The Marketplace also benefited plenty from Facebook's advanced algorithm and data analytics, which resulted in more targeted advertisements and personalized user experiences.
However, perhaps the most important advantage is that it's associated with a huge brand: Facebook. Although the name has been connected to many controversies over the years, it still conveys a trust factor in many people's eyes.
What started as a simple way for neighbors to sell their unwanted items has ballooned into an e-commerce giant in recent years. But is there any money in it for its parent company, Meta?
Revenue?
Meta generates revenue from Facebook Marketplace primarily through advertising and transaction fees. Since 2018, businesses and individual sellers have paid to promote their listings, which increases visibility and reach among potential buyers. These ads appear within the Marketplace interface, much like regular Facebook ads, and can be targeted using Facebook's sophisticated advertising algorithms.
Meta also charges fees on certain types of transactions. For instance, when a sale is made through Marketplace's shipping option, Meta collects a 10% or $0.80 per listing for items sold.
There's yet to be an exact figure for how much revenue this generates for Meta. However, we know that Meta's advertising revenue totaled $134.9 billion in 2023, with a net income of $39 billion. Even if the company isn't exactly raking in billions of dollars from this side of the business, it is providing a lot of valuable data for targeted advertising and keeping users coming back to the Facebook website.
Scams
Scams on Facebook Marketplace are an unfortunate reality that buyers and sellers need to watch out for - from fake listings and payment scams to phishing and nondelivery scams.
As the BBB reported in 2022, some scams include nonexisting big-ticket items like electronics, iPhones, or even cars and RVs where the supposed seller asks the buyer to first wire the money or send funds via Zelle, CashApp, Venmo, or a similar service. The seller and the third-party service are a con, and the item doesn't exist. The buyer sends the whole amount, part of it that serves as a deposit or inputs their bank details into a fake website.
If you have ever tried selling something on this platform, or any other, for that matter, you know precisely how rife they are with scammers of all kinds.
Despite challenges like scams, Facebook Marketplace continues to thrive, providing Meta with significant revenue opportunities and valuable user data, solidifying its position as a major player in the e-commerce landscape.