Everything E-Commerce Companies Need to Know About Selling on Instagram

The social commerce sector is expected to grow by more than 2 times its current value to $1.2 trillion by 2025, with a global market valued at $492 billion in 2021.

A social commerce is a type of e-commerce that makes use of social media in the context of purchases.

Is Instagram the most important social commerce influencer? No, it’s not a celebrity. What is your mobile brand’s greatest detractor or adversary? It’s pretty simple: Your business should have multiple touchpoints that people can reach out to.

It’s been reported that 83 percent of customers use Instagram to discover new items and services.

Given that Instagram has nearly one billion monthly active users, it’s a great place for businesses interested in expanding their social commerce approach.

The facts speak for themselves: selling on Instagram is the future of businesses seeking to raise brand recognition and optimize their online marketing efforts.

What is Instagram Shopping?

To comprehend what Instagram Shopping is, we must first grasp the basics of social commerce and how it differs from conventional e-commerce.

Although the two terms may appear to be synonymous, there are several distinctions between social commerce and e-commerce.

Social media and e-commerce can work in tandem to form a beautiful combination known as social commerce. Social commerce involves selling items and services on a social network platform directly.

Through the use of social media influencers, marketplaces can offer a similar experience to that of brick-and-mortar stores. Customers no longer have to go from store to store in order to find what they’re looking for since it’s all available on the platform. This makes social networking sites like Instagram an ideal sales channel for internet businesses.

Instagram Shopping has reduced the social commerce buying process by providing helpful tools such as Wish Lists and Buying on Instagram.

Instagram Shopping has improved Instagram’s standard features and added new ones. To enhance the social shopping experience for customers, image and video posts, Instagram Stories, and Instagram advertising have been enhanced.

In addition, it allows brands to:

  • On the platform, you may create your own online stores
  • Create product pages for your small business
  • Product tags should be included directly in Instagram advertising
  • Customers may now purchase items from your store on Instagram by going straight to the “Checkout” button

Why is selling on Instagram becoming so popular?

According to a Conviva study, US marketers invest over 30% of their entire advertising budget on Instagram stories.

Instagram is a social networking site that emphasizes on visual content, making it an ideal platform and sales channel for selling items and services.

Since 2012, Instagram’s popularity has been on the rise, when Facebook bought the firm for $1 billion.

Here are some statistics that showcase Instagram’s popularity:

  • In 2021, Instagram had 30 million users
  • Instagram is one of the most popular websites in the world, with almost 3 billion monthly visits
  • The Instagram app is the most-downloaded mobile application in the world
  • You’re probably familiar with the statistic that Instagram is watched by 60% of 18-34 year olds in the United States

Instagram’s continued growth has had a significant impact on how consumers connect with the companies they adore and buy their goods.

More than 60% of marketers use Instagram to engage with their followers. According to Instagram, one in two people worldwide have used the platform to discover new businesses and goods, with two out of three individuals claiming that it promotes meaningful interactions between companies.

What does Instagram’s popularity mean for online brands?

Instagram has a rather staggering statistic: users use the app to shop 44 percent of the time. Users are also more likely to follow a company on Instagram, with 90 percent of consumers following at least one brand.

An Omnicore poll revealed that 58 percent of Instagram users are more interested in businesses after seeing them in an Instagram Story.

50% of consumers have visited a brand’s website to purchase their items or services after seeing them in an Instagram Story.

Instagram’s influence on purchasing decisions

Instagram’s dominance in terms of influencing consumer purchasing decisions has made it the most powerful social media platform when it comes to influencing buying choices.

According to an X-Cart poll, Instagram has the highest influence on consumer behaviors with 51 percent, followed by Facebook at 23%.

Additionally, 72 percent of Instagram users said that they make purchasing decisions based on what they see on the platform.

When you take all of these figures into account, it’s easy to see why Instagram has become the most popular social media site for selling and purchasing items and services.

Drawbacks of selling on Instagram

It’s difficult to imagine that there are any drawbacks to selling on Instagram, given its wealth of features and benefits for both businesses and customers.

Unfortunately, this is not always the case for businesses that utilize the platform to market their goods and services. However, there are methods to minimize these downsides, which we’ll look at in further depth below.

Costly transaction fees

Transaction costs on Instagram are as follows: a selling fee of 5% each item or $0.40 for shipments valued at $8 or less, and a fixed fee of $0.20 per shipment.

A 5% selling fee may significantly affect a company’s or brand’s earnings if it has a small profit margin on each transaction.

Lack of control over the purchase process

Despite the fact that Instagram Shopping has lowered the shopping and checkout process for customers, it also comes with a serious problem for businesses.

Because a user’s payment and shipping information is immediately saved on Instagram, brands have restricted access to customer data.

As a result, companies are only allowed access to the necessary customer information to fulfill their purchase, considerably less data than if they purchased directly through the company’s website. This lack of data prevents businesses from reengaging their existing clients via email newsletters.

If a customer does not opt-in for email marketing at checkout, brands do not have access to their emails.

Additionally, due to a lack of email and other critical consumer information, companies are unable to offer loyalty programs to their existing consumers.

Difficulty fulfilling orders across multiple sales channels

Because shopping on Instagram with Instagram Shopping is the primary experience of a user’s entire buying journey, it adds another difficulty for firms: order fulfillment.

When multichannel marketing becomes more common, where companies reach new consumers through a variety of sales channels, multichannel inventory and fulfillment management via a single fulfillment dashboard become increasingly more important.

Because Instagram maintains all consumer data on its platform, it’s tough for businesses to properly manage omnichannel fulfillment.

Launch Fulfillment, for example, is a firm that specializes in providing the most comprehensive omnichannel fulfillment solution to Instagram Shopping issues.