How to compete with Amazon as a smaller retailer
When Jennifer Ekstrom was in college, she completed an internship at the Make-a-Wish Foundation. There, she was struck by the number of children battling cancer and had one of those “aha” moments that entrepreneurs often have. Back at school following the internship, she developed a business plan for her company, Headbands of Hope. The idea was to sell headbands online and, for each headband purchased, one would be donated to a little girl undergoing cancer treatment, and $1 would go to fund cancer research. The company launched in 2012 during Jennifer’s senior year in college. Today, it continues to grow with more products regularly added (headgear for boys, for example), and Jennifer has a tidy income.
The success of Ekstrom’s business, according to her, is the company’s story. In a recent interview, she stated: “Our story is what sells our products. Social media like Facebook and Instagram have been huge for us because we can show through pictures how purchasing headbands makes a difference.”
And a great back story is what has put many other smaller retailers into great revenue situations – Toms shoes is another example.
Competing With The Likes of Amazon
For would-be entrepreneurs who have great ideas for products but who fear that competition from the “big boys,” specifically Amazon, has become just too overpowering, some recent surveys may tell a different story. Many smaller retailers (actually 51% of those surveyed) are not selling their products on Amazon, and those who were stated that sales from their own e-commerce websites were higher than those from Amazon.
The entrepreneurs surveyed had other commonalities, one of which is that their average age is 37.5 – a younger crowd that is perhaps far more versed in the marketing strategies of online commerce. Another was that they took relatively low salaries and poured a lot of revenue into scaling their businesses.
Gaining a Good Market Share
For those contemplating an e-commerce business, there are some important things to think about before investing the money, time, and hard work. Here are just a few of those things:
Select a niche that is growing well. Arts, crafts and similar products are slower and revenue much lighter than other niches. The fastest growing categories right now are in personal and health care – beauty products, fitness equipment, and related niches that provide great value. Dollar Shave Club, for example, has realized tremendous growth because it offers not just a product that of everyday use, but a painless method of getting that product – in the mailbox every month. Pet supplies is another revenue-producing niche. Electronics and home improvement have experienced a slowdown of late.
If you are going to sell a product, make it yourself. Stores that are re-selling other people’s products are at plateaus. Those selling their own brands are averaging about 50% growth rate. The average growth rate of those that are in the profit zone are growing at about half that rate.
What’s in a Name? A Lot. Getting a domain that is both easy to remember and relates directly to your product and its value is critical. Dollar Shave Club, for example, is just about perfect. You are joining a subscription-based club; you can get razors for as low as $1 a piece. Get creative, run your options by others, and check here to make certain that your domain name is available.
Get the right software tools. For shopping cart platforms, Shopify has built a great system; a good email service, such as MailChimp has loads of features for businesses to use as they scale; CRM software will also help in providing the type of customer service that will keep customers coming back and recommending you to others. Yotpo is a solid source for “making hay” with user-generated content.
Social Media Vs. SEO. You cannot ignore either. Social media is where entrepreneurs can tell their stories, can post lots of great content, can showcase products and happy customers, and grow their audiences by developing relationships. On the other hand, SEO is certainly not dead. There are still lots of generic searches for products, and getting a decent pagerank is valuable. Make sure that you have someone who can help you with this if you are not versed on SEO strategies.
Don’t ignore Amazon. Yes, you may be competing with Amazon, but how about making use of it as well? Becoming a seller on Amazon has plenty of advantages, even if revenue from it is not as great as from your own site. Featuring your products, having those products reviewed by customers, and showing up in its search results cannot hurt.
E-commerce is where it’s at right now, but it is also hugely competitive. Any small retailer who hopes to gain a market share in his/her niche must find ways to show his value to potential customers. Think first of what your product can do for your target audience and focus on that in all of the content and other marketing strategies you develop.