The survival of SMBs is also essential for Facebook’s bottom line, as they make up a significant chunk of the platform's advertiser base. In 2017, Facebook COO Sheryl Sandberg said that more than 4 million SMBs advertised on the platform. Earlier this year, the social media giant said its total advertiser base had grown to 8 million, so the number of small businesses is likely much higher.
By helping SMBs survive the pandemic, Facebook is ensuring that those businesses will continue to advertise on the platform once the economics are there. Facebook Shops will also create two new revenue streams for Facebook: Companies will be able to buy Facebook ads to promote their Shops, and when customers use Facebook’s checkout option, it will charge them a fee of 5% per shipment or a flat fee of $0.40 for purchases of $8 or less.
So far, making a purchase via social has been a relatively niche activity. According to a June 2020 eMarketer survey conducted by Bizrate Insights, 18.3% of US adults had bought something through Facebook in the past year, compared with 11.1% for Instagram. But 70.4% of respondents said they had not made a purchase through any social media platform in that timeframe.