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Create a product to monetize Facebook Marketplace  
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in Product Design by (716 points) | 157 views

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Create a product to monetize Facebook Marketplace

Assumptions

  • Facebook Marketplace is a place that users can use to [1] buy or sell used or "open box" products (vinage clothes or sofas), [2] advertise or source services from small businesses (TV mounting or plumbing), or [3] promote or find new opportunities (apartment rentals or piano lessons).
  • Users might choose FB Marketplace over other services due to the number of people that are already active users on the platform. Either it's nothing extra for them to sign up for, they've heard of others' success stories or they believe there is a natural abundance due to prominence of FB users.
Likely Users:
  • Young professionals in a new city who are looking to decorate their new apartment at a low cost. They may choose FB Marketplace because they either are working with entry-level salaries or are unsure of how long they'll be living in their current city. Either way, furnishing their apartment for cheap is a benefit for them.
  • Tutors or teachers. As the world becomes increasingly more "eyes down" and digital-focused, they can expand their reach by promoting their services to a wider local network. Their FB Marketplace posting is the 2020 version of a typical flyer on a billboard. The power of word of mouth is greater here.
  • Small business owners. They can position themselves directly to prospective customers in their community and speak explicitly to the needs of those most likely to reach out to them.
I'd like to pursue an option for Young Professionals.
  • The main needs of this audience for FB Marketplace is:
    • To find quality furniture
    • To find a decent place to live
    • Maybe to find someone who can cheaply mount their TV
  • A main pain point or concern of theirs would likely be that they are unsure if they can trust the resources that they are finding.

I propose the following solutions for this population:

  • New Neighbor: They can pay for this personal shopper-like service, which would find reputable sellers, apartment listings, etc. This service would be based on data from the number of sales from a poster has had in the past and/or reviews of earlier transactions from their customers
  • Marketplace Insurance: This would be a fee charged to the seller to give the prospect the confidence that the transaction is legitimate. The fee would be based on the cost of the item for sale. Let's say 70% of the fee charged is a deposit that the seller would get back if the transaction is positive. The other 30% is FB's service fee. If it is a fraudulent transaction, the seller would get nothing back and the deposit would go towards rectifying the harm caused to the customer.  
  • Dynamic Ads: FB already serves up ads, but they could further monetize the platform by leveraging the user data to sell to businesses/sellers alike. FB knows when we've just graudated, can detect we're in a location that's different from that posted on our profiles, and can see our Marketplace search history. That data could be used to target ads to the right customers at the right time. The ads on the platform today appear to only be based on the listed profile location & are not dynamic enough to change based on the location you are searching for. That said, if a user is searching for furniture in Seattle while being located in SF or if their current location is Seattle, the ads should assume that the user is using Marketplace for the location that they are searching for or located in (Seattle), despite what's shown on their profile (San Fran).
Each of the above solutions have their pros & cons:
  • The New Neighbor concept might easily establish warm "Facebook is here for me" feelings and the implementation of product/transaction reviews behind a pay wall is fairly easy. However, expecting new college grads or professionals who may or may not have had their moving expenses covered to pay for a service that they could do on their own may not make the best impression and therefore may have low engagement rates. Also, it's not the best look for Facebook if they made you pay for what so many other platforms/services provide for free: customer reviews that may or may not be honest.
  • A stamp of Marketplace Insurance on a listing would certainly give the buyer confidence that they can trust the transaction would go smoothly and that the seller is legitimate. From a seller's perspective, this show of dedication to selling their product should also attract more buyers who are looking for the real deal, ultimately giving them a leg up. Still, it may turn some posters off from having to pay to be seen as "legitimate." These concerns can be eased with the proper messaging and positioning throughout the channel, however. Additional work would also need to be done to ensure all of the legal ramifications of providing "insurance" are vetted.
  • Dynamic Ads are a quick and simple solution to implement. Facebook can use its existing data and location services to make assumptions about what their customer needs. This can also make the search easier for the young professional. For example, if they are not seeing any furniture listings of interest on FB, how convenient that FB serves up a Seattle West Elm ad right as they get ready to give up. This approach, however is not unique and it doesn't necessarily serve the person who might be looking to score a deal on a new mattress or dining room table.
 
My final product recommendation for monetizing Facebook Marketplace, therefore, is Marketplace Insurance. The product provides that extra level of comfort and security to young professionals who are looking to save money on large purchases and are also looking for tasks that are as stress-free as possible. Over the other ideas, Marketplace Insurance will position Facebook as a platform that truly cares about the concerns of its users and it is a more enticing click than the standard ad. Marketplace Insurance also lends authenticity to the seller. Any concerns about the new fee or the product's benefits for the seller can be addressed through effective copywriting. Additionally, the legal risks of providing an "insurance" like product can be mitigated through Compliance prior to launch.
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