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How to Compete with Amazon as a Small E-Commerce Business

E-Commerce Business, small businesses, compete with amazon, brand recognition, Ethical Shopping

In this day and age, any company choosing to enter the e-commerce space knows exactly what (or who) they are up against. Indeed, Amazon is not only the biggest name in e-commerce — it is one of the biggest names in world business. So, how does a small, independent company compete with limitless resources and global brand recognition? As with all competition, it’s all about knowing your strengths and weaknesses.

Know Your Strengths

It is important to acknowledge that small businesses do have some advantages compared to Amazon. Factors which would make an online shopper use a small business include:

  • Ethical Shopping — Consumers are turning toward transparent, ethical shopping in several industries, including fashion. With several scandals regarding their tax, employment, and business practices, Amazon is increasingly looking like the more unethical choice when compared to some small businesses.
  • The Personal Touch — Not only is Amazon big and impersonal, but its branding and design are also purposely bland. You, on the other hand, can make your online store as beautiful and creative as you want — Creative Bloq has helpfully compiled some of the best examples for inspiration.
  • Simplicity – A 2019 article in the Atlantic highlighted the issues with Amazon’s AI that have made online shopping more confusing: too many products, with not enough differentiation or information, and no explanation as to pricing differences. As an independent retailer with full control over your stock, you can design a much simpler and more pleasant shopping experience for your customers.

It is always a good idea to look at the top stores in your niche for inspiration. For instance, if you’re into Shopify dropshipping, then you should always know the top shopify dropshipping stores in your niche and beyond, for inspiration. The easiest way to get this information is from eCommerce tools and more specifically dropshipping tools, such as SaleSource, which is a tool designed to help e-commerce businesses grow faster and more securely via the use of things like competitor comparisons, trend evaluations, and product analyses.

Starting with your strengths, rather than your areas of weakness, is the best way of ensuring your strategy is original and innovative. Otherwise, you are letting giants like Amazon and Walmart define who you are as a company.

Know Your Weaknesses

Of course, you do have to understand exactly where your business falls short compared to Amazon. Simply assuming that Amazon is competition “because it is Amazon” is not going to get you anywhere since it does not pinpoint the areas you need to work on. The main advantages the market leader offers the consumer are:

  • Inventory — Amazon has huge, sprawling warehouses of inventory. This means they “sell everything,” but also that they rarely run out of stock. One easy way to circumvent this issue entirely is to use a dropshipping model, in which you don’t have to personally handle inventory at all. You select which products to sell from a company’s stock — regardless of whether you want to sell tote bags, yoga mats, kids’ clothing, or everything in between —  and items go straight to the customer’s door.
  • Staffing — Amazon has their warehouse game down to a science. If you have a warehouse staffing issue, this is definitely an Achilles heel when it comes to competing with Amazon. Whether you’re slowly building up staff or need seasonal help, don’t discount using a staffing agency to connect you with temporary help while you build a full-time team.
  • Shipping — Amazon essentially created the consumer expectation for two-day delivery (and next-day delivery through Amazon Prime). Unfortunately, small companies now have to keep up with this expectation. BigCommerce has a great guide to shipping for e-commerce, which can help you with all the basics.
  • Brand Recognition — Amazon ranked second in the Axios Harris Poll 2019, which lists the 100 most visible companies in the US. In many cases, consumers head to Amazon because it’s the first name that comes to mind when they want to buy something online.
  • Price – Research has shown that price is the main motivator for people to shop with Amazon (free shipping is a close second). Small businesses can have a hard time competing on price since they do not have the same economies of scale.

Make a Strategy

Once you understand your relative strengths and weaknesses, it is easier to form a marketing strategy. You know, for example, that you should boost any ethical credentials you have, and that you want your website to be unique, well-designed, and easy to use.

You also know that you need to fight Amazon’s dominance as a brand name. An effective strategy for this is to focus on your SEO so that you can rank higher in online searches. This guide by Shopify has some excellent advice on how to do this, including how to use Amazon itself to your advantage.

Amazon dominates e-commerce the market so thoroughly that it can be easy to forget the thousands of small businesses holding their own against the industry giant. These businesses know how to leverage the advantages they have over Amazon while minimizing their relative weaknesses. They understand that just because Amazon is huge doesn’t mean that it is unbeatable, and all customers really want is a good deal. Learn these lessons too, and you can become one of them.


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