Social media is driving sales—at least for some retailers. Take specialty and gift e-retailer Fab.com.

“We are essentially an e-commerce site based on Facebook,” says Jason Goldberg, the flash sale e-retailer co-founder. That helps explain how the retailer, which launched in 2011, is on track to generate $50 million in sales from shoppers coming from social networks this year, one-third of its projected total of $150 million in online sales.

Goldberg attributes much of Fab’s outsized social commerce sales to its on-site social feed, which it launched in late 2011. The feed, which resembles the image-focused look of Pinterest, shows Fab.com shoppers who is buying what right now, and which products shoppers like (or, as Fab calls it, “fave”). If site visitor Jane Smith using the Fab.com user name jsmith purchases a Soggy Doggy Doormat, an image of that product will appear in the Feed section of the site with the tag, “jsmith purchased a Soggy Doggy Doormat.” 

The true power of the feed, Goldberg says, is unleashed when it is used by consumers signed in to the site via Facebook. That’s why a large banner on Fab.com’s home page prompts users to log in with a Facebook account. Once logged in, all actions—whether they be commenting on a product, purchasing an item or adding it to a list of favorites—are shared on a shopper’s Facebook timeline and in her friends’ news feeds. And she stays logged in with her Facebook credentials unless she logs out. That exposes her friends to her interactions with Fab. With loads of consumers regularly interacting with the Feed, the retailer’s customers are exposing other consumers to Fab’s brand. A recent weekday check of the tool showed around 80 products shared within one minute.

Fab also grants credits to shoppers whose social shares drive new customers to the site. Each shared product on Facebook includes a personalized URL, so if several of Jane Smith’s Facebook friends click on the picture of the Soggy Doggy Doormat and join Fab.com, Jane gets rewarded. Jane gets a $30 credit after 10 friends join, 25 friends get her another $30 credit and 50 new members gets Jane free shipping for two months. Fab.com says it’s granted nearly 5,000 $30 credits. Of those, Fab.com’s issued 1,300 secondary $30 credits and nearly 900 then qualified for free shipping since its founding in June 2011.

These types of viral sharing bring in more than half of Fab.com’s new customers, Goldberg says. It also drives higher-quality traffic. He says consumers who come to the site as a result of social media buy 5.5% of the time, a rate about 30% higher than traffic that comes from search or other sources.

For much more about how retailers are using social media to drive brand awareness and sales read the upcoming January issue of Internet Retailer magazine.