Value implications of followers in social marketplaces: insights into ego network structures

Abstract

Purpose

In social marketplaces, follower ego networks are integral social capital assets for online sellers. While previous research has underscored the positive impact of the follower number on seller performance, little attention has been given to the structure of follower networks and their value implications. This research investigates two structural properties of follower networks—network centralization and density—and examines their main and contingent effects on sellers’ sales performance.

Design/methodology/approach

A 13-month panel dataset of 1,150 sellers in Etsy, a social marketplace for handmade and vintage products, was collected and analyzed. A fixed effects model was adopted to validate the hypotheses on the main effect of centralization and density, as well as the moderating effects of two store attributes: store age and product diversification.

Findings

We find that both network centralization and density negatively impact sellers’ sales performance, and these effects vary across store age and product diversification levels. Specifically, the negative effect of network centralization is less pronounced for older stores than young ones, whereas the negative effect of density is more severe for stores with high product diversification.

Originality/value

This research contributes to social commerce research by highlighting the significance of network structure, alongside network size, in assessing the value of followers and offers practical guidance for sellers in social marketplaces seeking to optimize their follower networks.