Social media one-stop for small businesses

Entrepreneurs turning to e-commerce to avoid costs of having storefront

Kbre Hamilton has l ong worked as a model and a tavern server, but five years ago when he snagged a dresser at a garage sale and gave it a coat of Emperor’s Silk red paint and some new knobs, he stumbled onto a new way to make money. The 33-year-old opened Hamilton-based custom furnishings business Fresh Furniture Co. — but he didn’t bother to set up a storefront. Instead, he grabbed a phone, snapped photos of his pieces and started selling directly on Facebook and Instagram.

“I haven’t done a storefront because of the cost,” Hamilton said. “I did have a website, but far more people were engaged in the social media. That is where I get most of my clients and referrals from.”

The entrepreneur’s decision to sell solely on social media is quickly being embraced by others who want to minimize costs, responsibilities and risk of failure. Social media giants are also hungry to cash in on the trend that provides them with another avenue to drive clicks and, ultimately, profits.

In recent months, social platforms have rolled out a handful of retail-friendly features.

Facebook launched its Marketplace offering that lets people sell items through its platform in Canada last July and earlier this year expanded chatbot capabilities, allowing customers to place online orders, make reservations and get answers to customer service queries through the platform’s Messenger tool.

In March, Instagram started offering Canadian businesses a feature that lets users tap on photos of products or people and learn more information about the items or be linked to a spot where they can buy them.

It helps companies increase sales because users can easily and instantly make a purchase without having to leave the platform or start searching for the item online or in store. Companies also gain access to data on how many people are tapping to see or buy their products.

Instagram is also experimenting with allowing customers to make reservations or appointments through the app.

“We are probably in version one of what shopping can be,” said Susan Rose, Instagram’s director of product marketing.

She didn’t offer specifics on how Instagram might try to cater to entrepreneurs like Hamilton next, but noted half of the businesses on the platform don’t list a website, making Instagram their mobile presence.

In September 2015, website host GoDaddy research showed 59 per cent of Canadian small businesses don’t have a website — with 41 per cent believing their companies were too small to warrant one.

However, within the next few years, a handful of successful online businesses — mattress purveyor Casper, eyeglasses company Warby Parker and apparel brand Frank and Oak — started moving away from their original business model towards opening bricks-andmortar locations.

Most businesses operating primarily or solely on social platforms are small artisans or entrepreneurs drawn to the low cost and ability to experiment with little risk, said David Soberman, a University of Toronto marketing professor.

The concept of operating a business solely on social media is still in its infancy, he said.