July 26, 2019
3 min read
As the top player in the industry, Amazon is a tough opponent even for high-volume sellers. The ecommerce behemoth has massive power and nearly unlimited resources, but there’s a reason that plenty of online retailers have found success selling on Amazon. It simply requires a different set of strategies that puts your brand’s size at an advantage—what works when you’re making millions rather than billions.
We’ve worked with more than 10,000 ecommerce companies over the last decade, and we’ve learned what works and what doesn’t when it comes to competing with Amazon. To be successful, you generally have to strategize even before launching your business (but you can certainly incorporate these tactics even if your brand is already thriving.)
Find A White Space
One of the easiest ways to compete with Amazon is to leverage a unique position in the market with uncommon products, or uncommon versions of top sellers.
Some examples of this:
- A moderately priced version of a high-end product
- Lesser-used materials for popular products
- Custom products
Any of these offerings give the seller a differentiated position and an opportunity to attract customers who are looking for a product that better suits their needs.
Online retailers who can carve out a niche are at an advantage because with fewer competitors, they have more control over pricing and marketing. This isn’t to say that Amazon can’t enter the space once your product starts selling, but you’ll still have prime positioning as an early seller of the product and, therefore, an authority on it.
If you’re looking for ideas, download our white paper, The New Rules For Competing With Amazon, for inspiration.
Encourage Recurring Sales
Now that you have ideas about what to sell, it’s time to determine how to structure your business to encourage recurring sales. This will minimize your costs and efforts while maximizing the lifetime of your customers, therefore letting you grow your business more strategically.
Recurring customers are advantageous to any online retailer for a few reasons. First, having more existing customers than first-time purchasers lowers your average customer acquisition cost. Second, you expend fewer resources on selling to existing customers than trying to capture new ones.
Most importantly, existing customers who are already in the habit of buying your product regularly will be more resistant to competing offers (namely from Amazon) and more accepting of price increases. By switching to a competitor, a shopper has to break a habit and learn a new product. Time is too precious of a resource to waste, which keeps habituated customers from making the switch to an Amazon offering. You retain the customers, and they stay happy; It’s a win-win all around.
The success of recurring sales is the idea behind subscription boxes, to which 21.4 million Americans were subscribed as of last year. Receiving the boxes, which usually ship monthly, becomes a habit for many customers. The process is automatic, starting with a credit card charge and ending with a delivery on the same date of each month, quarter, or other predetermined unit of time.
Online retailers can learn a lot from the subscription box model, which offers customers the habit-creating convenience they seek while shopping online. Get more tips about building a recurring business from our white paper, The New Rules For Competing With Amazon.
Dominate Niche Markets
You’ve now created a product catalog of specialized offerings and have a robust base of repeat customers, so where do you go from here? The answer is to capture more of your market.
Because you found a white space and offered products to fill it, there is a good chance your niche market is fairly small. Amazon tends to avoid small markets because there is less opportunity for enough profitability to make much difference. Therefore, small markets are where high-volume sellers thrive. There is usually only enough room to support one business as it scales, and that one business can be yours if you expand strategically.
Think of related products to the offerings you already have and how they would fit into your customers’ lives. You might have helpful feedback from your customers already, or you might see a natural expansion opportunity. The key is to start small and capture your existing market before moving to new ones.
For example, if you sell backyard water slides, it makes the most sense to start selling other backyard party gear like tents and dunking booths. Another expansion could add water guns, pool floats, or other toys to your catalog.
Expansion offers online sellers the chance to cater to new customer groups and turn first-time buyers into recurring customers. They then provide you with more profits to fund yet another round of growth, and soon your business will be an empire.
Get More Tips
Webgility’s founder and CEO came from Amazon and knows the ins and outs of how to compete as a high-volume seller. Though these initial tactics are crucial, there is plenty more to learn about growing your business alongside the largest ecommerce brand in the world.
That’s why we’ve teamed up with Feedvisor to put together the top strategies for Amazon sellers looking to scale their businesses. Download the white paper today for more examples and advice from online retailers who have been in your shoes.
