With a little help from Facebook, the gaming industry is on a whole new tear of wealth creation. CityVille-maker Zynga, for example, now has a larger market cap than Electronics Arts.What happened was that Zynga CEO Mark Pincus and other social games entrepreneurs figured out a way to use Facebook’s News Feed to get new gamers.
Since forever, everyone’s wondered if e-commerce companies, from Amazon on down, would be able to open storefronts on Facebook and pull of the same trick – that is, increase sales with the help of Facebook’s “social graph.”
A couple weeks ago, we heard from a CEO at a big ecommerce company, who told us he’s had 5 meeting with Facebook over the past month, and that “all companies are working with Facebook to sell more things on Facebook and do customer support.”
We asked readers in the industry to share details on their Facebook ecommerce experiences. Here’s what we heard back.
- Incipio Technologies, a firm that sells iPhone and other gadget cases and peripherals, finds that Facebook has been its number two source of traffic over the past 8 months.
- President Andy Fathollahi says that the final conversion rate among shoppers referred by Facebook is 2X the average.
- The number of shoppers from Facebook adding products to a cart is 3X the average.
- Fathollahi says that Incipio “would love” for Facebook to expand Facebook Credits beyond virtual goods, and into e-commerce.
- He’d happily pay as much a 5% per transaction, about how much PayPal and Amazon charge, but less than the 30% Facebook charges virtual goods dealers.
- One reason: Facebook shoppers might abandon fewer shopping carts if they could use Facebook Credits.
- A company called ShopVisible helps retailers like Incipio set up their Facebook storefronts.
- Another firm called SortPrice.com says it has set up more than 1,500 Facebook storefronts for its clients.
- SortPrice charges its retail clients on a subscription basis and includebuilding a Facebook storefronts as a part of a service.
- It says those retailers have put $3.78 billion worth of merchandise on Facebook – 7.6 million products in 53,000 categories.
- One of those clients is the Dallas Mavericks. Mavericks owner Mark Cuban says “you have to be where customers want to buy.”
- Cuban says he would also happily pay a 5% fee for Facebook Credits.
- Other SortPrice clients include Goflsmith, Petco, and Adidas Soccer.