how amazon works for this business

Few industries are dictated quite like ecommerce is dominated by Amazon, Walmart, and other superpowers. Despite the utter control these companies have on the space, there are still smaller ecommerce businesses that find success. This leaves other businesses and entrepreneurs wondering if there’s a repeatable recipe at play. And if so, how can more small ecommerce companies thrive in the shadows of billion-dollar corporations?

Exploring Amazon’s Tight Grip 

We all know Amazon is big, but just how big is it?

According to a recent report by eMarketer, Amazon’s ecommerce sales were expected to top out at $258.2 billion in 2018 – up an astonishing 30 percent over the previous year’s totals. And if true, this means Amazon has managed to successfully capture nearly 50 percent of the entire ecommerce marketplace. In all, Amazon accounts for 4 percent of the country’s entire retail sales revenue, which includes both online and brick and mortar businesses.

But it’s not just Amazon that’s flourishing. As the eMarketer report shows, there are a handful of other ecommerce companies raking in the dough. In terms of a percentage share of US retail ecommerce, eBay (6.6 percent), Apple (3.9 percent), and Walmart (3.7 percent) have significant stakes in the industry. Best Buy (1.3 percent), QVC Group (1.2 percent), Macy’s (1.2 percent), Costco (1.2 percent), and Wayfair (1.1 percent) round out the top 10.

When you combine the market share of these companies, you’ll notice that the top 10 ecommerce businesses account for 70.8 percent of the ecommerce industry – not exactly great news for the thousands of other ecommerce businesses that are trying to hang on and grow.  But with roughly one-third of the marketplace spread out for the taking, all hope isn’t lost. There’s still more than $150 billion in online spending that doesn’t go to these companies. In other words, the door is open, and somebody is going to capitalize.

There are advantages that come with being small. For ecommerce companies outside of the “big 10,” there’s an opportunity to seize opportunities that are left behind by larger companies that don’t have the dexterity to appease certain segments of the market. But these smaller ecommerce businesses – and small can mean anything from thousands of dollars in revenue to tens of millions of dollars in revenue – can’t be afraid to compete.  They must be brash and unapologetic and make it a point to step out of the shadows and into the light of the stage.

How Small Ecommerce Companies Can Thrive in Four Simple Steps

Small ecommerce companies can win at ecommerce – but a concrete plan is needed. Here are some actionable steps you can take:

  1. Set the Bar

Before you do anything else, develop a clear understanding of exactly what it is you want to accomplish. What does success look like in your eyes? Try setting a few SMART goals that are:

  • It’s not enough to say you want to increase revenues. You need to be specific about how much you want to increase revenues by. Whether it’s expressed in a dollar amount or percentage form, there have to be concrete numbers.
  • Specificity and measurability go hand in hand. Your goals must be capable of being measured in order to ensure you’re on track.
  • There’s something to be said for stretching yourself and pushing your business to go out and do great things, but a good goal has to be attainable in order to be useful. For example, you probably shouldn’t set the goal of becoming Amazon’s biggest competitor by the end of the year. Unless you’re Apple or Walmart trying to catch up with eBay, this won’t happen.
  • Align your goals with your business model. Relevancy will ensure you don’t lose sight of who you are in pursuit of individual goals.
  • Time-based. Finally, there needs to be some sort of time frame on your goals in order that you can measure progress and maintain the appropriate degree of intensity.

With strategic objectives in place, you can get into the nitty-gritty and begin competing.

  1. Differentiate Your Brand

The biggest problem with the ecommerce industry is the high level of competition that exists in almost every niche. Unless you’re selling a proprietary product in a unique product category, you’ll face competition. And for most businesses, it’s not just one or two competitors – it’s a dozen or more.

If you aren’t careful, you’ll end up bidding for customers. The cost of keywords will increase, and there will always be someone who can outbid you. And as soon as you stop paying for PPC ads, you disappear. But it doesn’t have to be this way. Don’t play the PPC game where you pay for your customers and let your budget dictate your revenue. Instead, set your business apart through brand differentiation. Strategic brand differentiation through purposeful branding, consistent content, and a clear, unique selling position will yield significant dividends. You’ll also find it easier to attract customers organically and to grow revenues without significant increases in expenses. (In other words, profitability grows exponentially.)

  1. Generate Traffic

Alright, enough with big picture ideas – let’s talk specifics. In particular, let’s focus in on how you can generate traffic in an effort to drive conversions. Ecommerce success is all about earning visibility and getting people onto your product pages. In today’s environment, link building is one of the primary methods through which you can accomplish this. But if you aren’t careful, your link building could come back to bite you. The key is to partner with a white hat SEO service that understands the fundamentals of organic link building and how it promotes positive brand exposure.

According to Sarah Jane Ross of Loganix, “It’s all about seeing the big picture. Link building, SEO, and content marketing all go hand in hand. You can’t neglect one at the expense of the other. All three elements fuse to enhance a brand’s exposure.” Social media is also a great asset for generating website traffic. But to maximize platforms like Facebook and Instagram, you need to drill down and focus on a specific audience.

Niche audience targeting helps you maximize your budget by focusing on reaching the customers that you know are already interested in your products (or are most likely to be interested). You can start by aligning your profile and content to this niche. “Many niche groups use specific words, slang, or non-typical word expressions that differentiate them from others,” social media expert Lesley Vos advises. “Whether you’re trying to connect with introverts, hipsters, or healthy lifestyle fans, it’s important to speak the same language they do.”

From a more technical perspective, you can create Facebook audiences and use the data and information they have on users to target very specific segments of the marketplace to purchase ads. Even within your own niche, you can target a particular faction of your customer base. Quality of traffic is more important than quantity of clicks. Put the emphasis on driving the right people to your website via organic methods of marketing. This doesn’t mean you can’t ever spend money – hence the note about Facebook ads – but paying for all of your traffic is a dangerous place to be. Lay the groundwork ahead of time.

  1. Personalize and Wow

If there’s one thing that Amazon does really well, it’s personalizing the user experience. Despite the enormous amount of products sold on the platform, Amazon somehow drills down and gives each user an experience that’s highly tailored to their wants and needs. If you visit most other ecommerce websites, this isn’t the case.

While you don’t have the same budget and technology that Amazon has, you should aim for personalization as well. In doing so, you set your brand apart and deliver unique value to your visitors.

Personalization may look like storing cookies and allowing visitors to access items they previously put in their shopping cart upon returning to the website. You may also consider allowing customers to create profiles and set up recurring deliveries on items they purchase frequently. Get creative!

Balancing Patience and Ambition

For smaller ecommerce companies that are fighting for the remaining 30 percent of the ecommerce industry’s revenue, it’s important to strike a balance between patience and ambition.

Patience is necessary in order to avoid moving so quickly that you make rash decisions that go against your core business values. Growth for the sake of growth isn’t a wise strategy.  It’s all about manageable expansion that aligns with your objectives. If things get out of control, you’ll eventually crash and burn.

Ambition is necessary in order to expand beyond the status quo that you’ve become comfortable with. Healthy ambition will cultivate bridled aggressiveness that allows your company to pursue new horizons.

Patience and ambition must be balanced. If an ecommerce company skews too heavily toward one or the other, things quickly get out of hand. Do what you can to make smart decisions that keep the future in mind. And remember that your goal isn’t to catch Amazon (or anyone for that matter). Your main objective is to grow revenues year over year, while satisfying your customers and building a sustainable business model that will thrive for years to come.

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Peter Daisyme is the co-founder of Palo Alto, California-based Hostt, specializing in helping businesses with hosting their website for free, for life. Previously he was the co-founder of Pixloo, a company that helped people sell their homes online, that was acquired in 2012.

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