Understanding the Ins and Outs of Competing with Amazon


Amazon has grown to become one of the most profitable companies in all of history. In fact, Amazon recently surpassed Microsoft as the largest public company as of 2019 and sits at a value of approximately $800 billion.

With Amazon controlling such a large share of the e-commerce market, it’s often impossible for smaller businesses to even come close to competing.

However, it’s not impossible.

Not sure where to start? Don’t worry, we’ve got you covered.

Let’s take a look at everything you need to know about competing with Amazon and giving yourself the best chance of success.

But first…

Why is Amazon So Successful?

In addition to serving as a platform for one of the most extensive online stores the world has ever seen, Amazon also provides streaming services, lightning-fast shipping, and unlimited photo storage to its users.

With the release of the Amazon Echo, the e-commerce heavyweight is also quite literally a household name at this point.

On top of all that, Amazon has over 600,000 employees.

As you can see, it’s not surprising that many entrepreneurs looking to get into the e-commerce industry take one look at Amazon and proceed to give up on all of their ambitions.

Even businesses that only cater to a local region could find difficulty in facing off with Amazon if they don’t take the proper steps.

So, how could a small company with a fraction of the employees ever hope to stand a chance?

Let’s dive in.

Speed + Convenience Are Key

One of Amazon’s most notable attributes is the minimal effort it requires to get your purchase shipped quickly to your doorstep.

So, you’ll need to take this aspect and improve upon it.

As a brick-and-mortar location, you already have a minor advantage over Amazon—your customers can go directly to your store to purchase their desired goods, a convenience Amazon users don’t have.

You also have something else you can offer: Same-day shipping.

As long as your orders are placed locally, you have the capability to provide your customers with their packages on the same day they’re purchased.

If your business is already fairly organized when it comes to fulfilling orders, you may even have the ability to advertise to customers that they’re able to receive their packages within hours.

This level of convenience is something that is rarely seen in any industry, so take advantage of it as best as you can.

Provide Buyers with Payment Flexibility

Not everyone has the money they need for their purchase readily available.

In these cases, you’re missing out on potential customers if you don’t offer them a bit of flexibility when it comes to payment.

Let’s take a look at an example where this comes into play.

David owns a small store where he sells products related to technology. This includes computer parts, phone screens, tools, etc.

Many of what he keeps stocked on his shelves can be purchased on Amazon. What David offers, however, is the opportunity for his customers to pay off their purchases over a period of 6-12 months.

For first-time customers and students, he offers this payment plan at 0% interest. For everyone else, the interest rates are still rock-bottom.

This level of accommodation is virtually guaranteed to have people consider your company for their purchases. Apparel company American Eagle has recently taken advantage of this practice.

What kind of deals you make, though, will depend on the capabilities of your business.

If your budget is tight, don’t feel ashamed not offering extended payment plans. Anything other than a full, upfront payment provides something to customers that Amazon doesn’t.

Choose Your Product Prices Carefully

Amazon’s prices are frequently less expensive than buying the same item at a brick-and-mortar location. But, this doesn’t mean that you can’t price your products competitively.

It’s important not to price your goods too low, though. This is especially true if your company is still in its infancy.

Eventually, you may run into a situation where you aren’t able to lower your prices any further but still need to provide an incentive for your buyers to choose your company over Amazon.

In this situation, you’ll need to take advantage of promotional efforts to make your products more enticing.

Discounts are a viable option as long as you don’t end up creating too much of a dent in your profits. Things like rewards programs or offering benefits for larger purchases (such as store credit) can also help you make more sales without financially straining yourself.

If you get your goods from a vendor, you can also negotiate a deal with them that will allow you to lower your prices a bit further.

Products that you sell at a particularly high volume can often be purchased from your vendor at a discounted rate. This can both allow you to sell more overall at a price that’s more comfortable for your buyers.

Offer Products You Can’t Find on Amazon

This isn’t to say that your company shouldn’t offer similar products. But, it’s a good practice to avoid offering the exact same item that someone could find on their own by searching Amazon.

The key here is to avoid products that appeal to a general audience. Instead, you should offer something that appeals to a niche demographic in order to provide a selling point that Amazon doesn’t have.

For example, let’s say you have a customer who builds pump control panels. You might have much difficulty trying to successfully sell the same contactors, breakers, and terminal blocks that Amazon offers.

However, if you decided to offer a pre-manufactured DIN-rail assembly, you’ll have a much greater chance of making consistent sales with that customer.

In this scenario, you’re also more in control of how you price your products. Since a custom pump panel subassembly can’t readily be found on Amazon’s site, you don’t have to worry about significantly cutting your profits.

Make the Purchasing Process as Simple as Possible

As previously mentioned, Amazon is renowned for how simple their order process is. After a few clicks, your item will be on its way (and often arrive within two days).

So, you’re going to have to make things even simpler when it comes to your purchasing process.

Save Your Customer Some Clicks

It might sound a bit exaggerated, but extra clicks and mouse movement can build up mental fatigue in your customers.

This is especially true for those who have been working on computers all day or aren’t particularly well-versed in navigating through webpages.

So, you’ll want to eliminate as much effort on their end as possible.

This can be achieved by having the cart on your online store automatically refresh itself whenever an item is added or removed. You should also be able to add/remove items from the checkout page.

Simplified Design

Having anything on your checkout pages other than information related to your order can prove to be a significant distraction to your buyer.

So, the checkout page should only include info about the item they’re going to purchase. The page about delivery details should only include info on the shipping address.

You see where this is going.

Additionally, any coupon codes should be able to be inputted right on the checkout page without a second window popping up.

Less is more in this scenario, and it can go a long way toward ensuring your customer goes through with their purchase.

Integrate Multiple Payment Gateways

The more ways your customers can pay, the more likely they are to pay.

In addition to accepting debit cards/credit cards, payment gateways like PayPal and Stripe will increase the number of possible sales you can make.

Integrate those onto your store if possible in order to provide a bit of extra convenience for your customers.

Have a Stellar Shipping Policy

While we’ve already talked about same-day shipping, there are other aspects of this process that you’ll need to optimize.

The more accurate of an estimate that you can provide your customers with when it comes to shipping, the better.

For example, it’s always better to say something along the lines of “your order will be delivered between 3 PM and 8 PM” as opposed to “your order will be delivered today.”

A tracking number that allows buyers to check their order status is crucial, too.

It’s important, though, to be honest when it comes to the order details. If there’s only a slim chance that order will make it out that day, notify the customer of that.

The last thing you want is for someone to not get their package. Even if it arrives early the next day, you’ve already damaged the trust they had in the reliability of your services.

Similarly, make sure you learn from any customer complaints to improve your policy over time.

If an item wasn’t left in the correct location, didn’t require a signature when one was requested, etc., take the necessary steps to prevent those issues in the future.

…And a Stellar Return Policy

While Amazon’s policy isn’t one that many people complain about, you have the opportunity to improve in this area.

Once again, your main advantage comes from having a physical location that your customers can visit in order to return their product. If there are any issues with their order, you’ll be able to correct them right away.

It’s also not a bad idea to offer a full refund on returned items. While this can seem like a bit of a stretch (especially for smaller businesses), it accomplishes two tasks:

  1. It shows that you’re confident enough in your merchandise that returned products will be few and far between.
  2. It builds trust with your consumers by minimizing the risk they take by shopping at your store.

Staying open-minded when it comes to your return policy will instantly build a level of respect that many businesses have trouble achieving through other methods.

Be Transparent as a Company

Despite Amazon’s massive inventory and stellar customer service, they’re still a large corporation that the average person isn’t likely to resonate with.

This is where you can step in.

By offering insight into how your business is run and the values that it’s founded upon, you’ll create a brand that has life.

Your website should have information about you and your team to offer customers a look at what goes on behind the scenes. Showing who you are as a company can go a long way toward connecting with your audience.

For example, let’s say you own a company that sells organically-made, biodegradable handbags.

Your company is actively working toward improving the quality of the environment, but people aren’t likely to learn that information unless you tell them.

So, your business should strive to inform its customers of your brand’s values, your company’s goals, and how it plans to make a positive impact on both the industry and the lives of its consumers.

You could also send thank-you cards to first-time buyers or those who recently have made large purchases in order to show your appreciation.

Treating customers like people instead of sales numbers goes a long way in securing repeat business.

Competing with Amazon Can Seem Impossible

But it doesn’t have to be.

With the above information about competing with Amazon in mind, you’ll be well on your way to carving into the e-commerce space and reaching numbers you never thought you could.

Want to learn more about what same-day shipping can do for your business? This article has plenty of useful info.

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