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Four reasons why Facebook users aren’t buying

February 23, 2012 | Online Marketing

Except for a few exceptions such as music and games, which can be inherently social, direct selling on Facebook is a bad idea for most companies for four reasons, the main one being people don't go to Facebook to shop, but to socialize and have fun.

There are various reasons why you might want multiple retail outlets, but they generally boil down to more opportunities for additional sales. However, there is no evidence yet that Facebook creates those additional opportunities. Instead, they seem to cannibalize sales that a company could have made by using promotions to drive people to its own site.

There might be ways to make the purchasing process inherently more social, but that would mean a different approach than setting up a storefront on Facebook and directing customers there instead of your own site. And if there aren't incremental sales, then a company ends up spending more resources on its entire retailing strategy, lowering margins as a result.

Many people distrust Facebook. That might seem unfair, given that other companies collect the same types of data to better target advertisements and marketing. But this is a case where perception trumps reason. According to Nicholls, some studies (he didn't name them) suggest that people are reluctant to shop on social network sites because of concerns about security and privacy.

Get the full story at Inc.com

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