Let’s start with a simple question – do you run a business page on Facebook? If the answer is “Yes” then my next question is “Are you serious about your business?” If you’ve answered “Yes” again, then in this article I will try to explain to you why relying solely on Facebook is putting your business at risk.
How does Facebook Algorithm work?
Before we start, we have to get familiar with Facebook’s algorithm and how it works. Facebook’s algorithm takes into consideration thousands if not millions of signals from Facebook users before it decides what goes into each user’s newsfeed and what doesn’t.
Such signals include – what pages/celebrities do you follow, what kind of posts you like, share, and comment, what content do you post, how often do you hide content from your news feed and what type of content you prefer not to see, what kind of ads do you engage with, how often do you log in, who do you interact with, and a billion more.
There is no conspiracy here – Facebook is not spying on you but the algorithm is trying to feed you with the content you are most likely to engage with. Why? Because this is the best way to keep us on Facebook and because first and foremost we like to see content that reflects our interests, hobbies, and personalities.
Perhaps you have noticed that your newsfeed is mostly comprised of posts from your closest friends. The only reason for this is that when you interact with someone via Messenger or liking and commenting on their posts, you are giving Facebook signals that this person is A) a close friend, B) someone posting engaging content or C) someone you like interacting with.
The same goes for content you see from pages. Most of us like tens or hundreds of pages. However, we see posts from only a couple of pages. This happens partly because many of the pages we’ve given a “like” in the past are either inactive or the content they post is not relevant to us anymore.
Facebook Algorithm Changes
However, this is just a part of the equation. Until 2013 Facebook pages had a tremendous organic reach, which by some estimations was 70% of the page followers. In other words, if your page had 100,000 likes you could easily reach 70,000 of your followers with a single post without promotion. Those were the golden days of Facebook pages when everyone from amateur online retailers to media outlets took advantage of Facebook’s organic reach. And while the latter used it to bring traffic to their websites, the first tried to sell their products and services to followers.
Needless to say, the largest social platform has since gone a long way. After a couple of algorithm changes, organic reach has now dropped below the 5% line, meaning that the Wild West days are over. Again there is no conspiracy here. Facebook is not forcing us to buy ads. Instead, Facebook is going back to its roots. The idea behind the creation of the social platform was to bring closer friends and relatives who are physically separated.
This is the number one reason why the majority of posts in your newsfeed are from your friends. This is why you have to adjust your preferences in order to see more content from pages you follow. And finally, this is why many Facebook-based businesses went bankrupt.
How to fail as an online retailer
When the organic reach plummeted, page owners were left with fewer people they could sell to. This led to a chain reaction, which ultimately proved something experienced investors know – you shouldn’t put all your money on one bet.
Instead of investing in their own websites, these so-called Facebook retailers believed that they have built a sustainable business model. Of course, after the algorithm changes, many of them realized that they have been doing business the wrong way.
So are you going to make the same mistake?
Today it’s rare to see a page trying to directly sell anything to its followers. However, we can see that history repeats itself. Now the same that was taking place on Facebook 10 years ago is happening on other platforms such as Etsy, Gumroad, and IndieMade. Small businesses are not investing in their own websites. They are focused on building their brand on other platforms. The question is what happens if all of a sudden Etsy shuts down? What if its fees skyrocket overnight?
The problem is not that you can’t sell on Etsy or IndieMade. You can and you should. What I am trying to say is – these platforms shouldn’t be your primary income sources. Your business is doomed if you rely on these platforms. Sure you can make a lot of money on them but you can make even more if you sell your products straight on your website.
Don’t get me wrong. I am not telling you to ditch Facebook, Etsy or Gumroad. That would be plain stupid. In fact, they are crucial to building your brand. Neglecting them may not mean your business won’t grow but if you are just starting out, being on these platforms could help you build a following and find your target audience and potential customers faster. Being on Etsy and its alternatives will help you validate your business idea. You’ll see whether the market actually has any interest in what you have to offer.
After a couple of months on Etsy, you should be able to tell whether your business is gonna make it or not. Regardless of the outcome, you should start working on your own website. Do not get fooled by the money you are making on these platforms. Your income might disappear just as fast as it has surged.
The advantages of Facebook, Etsy, Gumroad and the rest
These platforms are great channels for promoting your content. You can run ads on all of them and thus reach new potential customers. They allow you to interact with your customers and hear their feedback. In turn, you can use this information to improve your products and your overall service (support, guarantees, shipping, etc).
This is arguably the best pаrt of being on social platforms. What’s even better, you can build your brand, which is crucial in the long-term. Let’s say you run a family business. You craft handmade high-quality linen and silk sheets, which are fancier than anything else on the market. Once you build yourself an audience on Facebook and a loyal customer base on Etsy, you know that these people will follow you everywhere. They love your brand not only because of the products but because you offer unmatched customer service, your return policy is friendlier and you ship worldwide. Your customers will always prefer you in favor of your competitors.
You should then take the next step and ask them to buy from your website instead.
Etsy, Gumroad, IndieMade, they all let you build your own personal online shop within the platform. I can’t emphasize hard enough what an opportunity this is for small businesses. As a business owner who is just starting out, you don’t always have the resources to create your own e-commerce site and implement crucial services such as secure payment processing plugins, shopping carts, and shipping solutions.
The above-mentioned retail platforms have already taken care of that. As soon as you have products, you can start selling and this is fantastic. You don’t have to think about secure payment options or shopping cart integrations. However, this convenience comes with a price. And the price is lack of control.
The disadvantages of Facebook, Etsy, and Gumroad
First of all, Facebook wasn’t made for e-commerce purposes. That being said, you shouldn’t use it for direct sales. But you should use it as a marketing channel.
When it comes to Etsy and Gumroad, their sole purpose is e-commerce. The one big disadvantage the platforms have is their centralized nature.
Sure you can have your designated place on Etsy. You can even make it resemble your brand. But don’t forget that what you do can be done by other merchants as well. Many of them are already the leaders in your niche. Many of them have more resources to spend on ads, which ultimately drives potential customers away from you.
Today it’s harder than ever to stand out from the crowd. On Etsy, you lack identity, like it or not. And this isn’t the worst part. The worst part is that you let a giant platform decide the future of your business. When Etsy or any other platform is your only income stream, you are not ready to survive in the long-term. I am gonna ask you again – what happens with you when Etsy shuts down? People tend to forget that businesses have a lifecycle. Businesses die. Etsy is a giant business machine. But that doesn’t mean your business should die because of their extinction.
What happens when one day Etsy decides to charge you 20% every time you make a sale? What if the fee gets even higher? Are you going to stay there? A slight algorithm change can easily shrink your revenues. Are you ready to face that?
How to create a sustainable online business?
Let’s make one thing crystal clear. There is no secret formula. What I’m saying is not a panacea but it’s proved itself over the last 20 years. Successful online businesses invest their income in building their own websites. They invest in SEO and digital marketing. They invest in online reputation, customer service, and brand recognition.
Of course, you can always start small on Etsy. And when I say Etsy I mean any of its alternatives. But as soon as you start to generate income go an buy your domain. Start building your website, tell your story, present your products, and let people buy directly from you.
As soon as your website is live, take your time to improve its search engine optimization rankings. Some might say “OK, you tell us to avoid platforms such as Etsy and Facebook and be independent and then again advise us to rely on Google traffic through SEO”. I must admit you are somewhat right. However, when you do SEO you do not optimize your site for Google’s search engine only. When done right SEO improves your rankings in every search engine there is. So even if one day Google is no more, you’ll still be visible.
Furthermore, when you have your own website, you are the captain. You make the rules. You are in charge of what happens.
And believe me, if you are in for the long-term, Etsy, Gumroad, Facebook, Instagram, these all become just marketing channels. They are no longer the most important revenue streams for your business because you generate your revenue through sales on your website.
To sum up – use social and e-commerce platforms but don’t rely on them. The pillar of successful online business is your website. Not Facebook, not Etsy, not Instagram, not Gumroad, not Pinterest. Your. Own. Website.