A new sales frontier for small businesses

Dallas Morning NewsNovember 23, 2013 

BIZ SMALLBIZ-FCOMMERCE 2 DA

Amy Laws, left, and Nicole Metzger Brewer have racked up $4 million in sales this year for their Smocked Auctions without a brick-and-mortar store or even a website. The Dallas-based business makes its sales through its Facebook page. (Sarah Hoffman/Dallas Morning News/MCT)

SARAH HOFFMAN — MCT

The idea was simple: Sell extra inventory of children's clothes on Facebook.

Three years later, Amy Laws and Nicole Metzger Brewer have turned that one-time idea into a multimillion-dollar business.

Their Dallas-based Smocked Auctions doesn't have a traditional brick-and-mortar store or sell its smocked and monogrammed boys' and girls' clothes on a website yet. Regardless, the online bidding boutique hit $4 million in sales this year by selling on the social networking site.

"E-commerce is faceless, nameless," Laws said. "We run our business as an open book. Anyone could get on our page and see what people are saying. The fan interaction is gratifying as a businesswoman and a mom."

Small businesses and female entrepreneurs like Laws and Brewer are driving a new wave of e-commerce on Facebook, known as f-commerce. These retailers sell exclusively on Facebook or generate most of their sales on the site.

F-commerce emerged several years ago but it remains hit-or-miss, according to some analysts.

Nearly every retailer uses Facebook as a marketing tool, offering early access to sales and new products. Often, though, retailers direct consumers to their e-commerce sites.

Big players like J.C. Penney and Nordstrom tried but failed to establish Facebook stores. Others are experimenting: High-end brand Tory Burch recently opened a Facebook shop.

"The question is whether or not retailers can crack the commerce half of social commerce and use Facebook to go beyond awareness and engagement," Krista Garcia, an analyst at research firm eMarketer, wrote in a report this year.

Facebook retailers typically use auctions to sell wares such as children's clothes or jewelry. Instead of bidding on price, customers compete for the limited number of available items and sizes.

Third-party Facebook applications, such as Soldsie, help retailers sell on the site. Soldsie handles back-end processing such as invoicing and payment for clients. Customers can make a purchase by typing "sold" in the Facebook comment box. The San Francisco startup takes a 3 percent cut on every sale.

Besides Soldsie, retailers use other applications to establish Facebook shops.

Dallas mothers Amy Claro and Amy Coffey took a "let's try it" approach when they established Accessory Concierge in April 2012.

The women wanted more work flexibility and heard about the success of Smocked Auctions. They settled on trendy jewelry because Coffey had sold jewelry when she owned a floral and accessory boutique.

The business took off quickly. Within eight weeks, Coffey and Claro recouped their initial investment of $10,000 to $15,000. Accessory Concierge also became profitable early on. (The company is a Soldsie customer.)

Since the Facebook store's inception, Accessory Concierge has rung up nearly $1 million in sales.

"We had no idea that a year later, this is where we would be," said Claro, 38. "We're thrilled."

This method of selling has taken off because the limited quantity creates a sense of urgency, Claro said. The business holds twice-weekly flash auctions.

Still, selling on Facebook is not without challenges.

Some customers may not feel comfortable buying on Facebook, while the social network site has tight control over its news feed posts.

Coffey said understanding Facebook's algorithm on which fans see auction posts is the biggest challenge.

"We would post products and they sold in seconds because it showed up in everyone's news feed," Coffey said. "Now, each product is viewed approximately 150 to 200 times, but we have 31,000 fans. That's rough."

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