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3 Ways Small Businesses Can Fight with Amazon in Ecommerce

small businesses can fight with amazon - gravity payments referralcandy guest post

Any conversation about eCommerce eventually mentions Amazon – and sometimes the only way out is in. Matt Dho from Gravity Payment explains how small businesses can fight Amazon. 

Amazon – the bloated retail goliath of the modern era; hell-bent to destroy all that the small business owner holds dear. This is especially true when that small business owner wants or needs to sell products online. How can one compete against the company that sells everything, for less than you can, and ships it for free, faster than you can?It’s impossible, right?

I mean, come on. Amazon has their own personal version of Black Friday – Prime Day – where they sell billions of dollars in merchandise in a single day to people who already pay $100 a year for the privilege of shopping with them.

If Tom Cruise can run 67 MPH and pilot corkscrew spirals in helicopters at 56 years old, you, my scrappy small business owner friend, can still put up a fight in the heinous Darwinian death-match known as Ecommerce.

When I started writing this article, it was going to be 90 degrees in Seattle. So, I purchased a Vornado OSCR37 oscillating tower fan with four speeds. Because I am an subscribed to Amazon Prime’s loyalty rewards, I will receive this fan same day and enjoy the cooling touch only a 120V, 37” tower fan by Vornado can provide.

The point is this: sometimes the only way out, is in. Sometimes to play with the big dogs you must fight on their turf, while establishing your own corner on the block and owning it as well.

With that, here are three ways small business owners can fight retail giants like Amazon in Ecommerce and beyond.

3 Ways Small Businesses Can Fight Amazon in Ecommerce

1. Less Clicks = More Sales.

If you sell products online, ensure your potential clients can purchase that product as quickly as possible, as easily as possible. Ease of use online means a few things, but one thing it means for sure, is less clicks.

small businesses can fight with amazon - vornado many clicks

As you can see from the above image, Amazon has a 1-click buy option. You may not be able to get to that level of simplicity, but you can get close. When building your website, keep the user experience in mind. Understand that every click is something the purchaser must do. It’s a conscious decision to get one step closer to spending money. The fewer decisions they contemplate, the more likely they are to decide on the initial thought and purchase your product.

On Vornado’s site, their fans are front and center on their home page. Under each image of a fan, is an Add to Cart button. When I click this, I am brought to a new page showing my cart, then I need to click Proceed to Checkout. Once I click that, I am brought to a page where I fill out shipping and billing addresses, enter my payment information, and submit my order.

Three clicks. Not bad.

But why not evade that third click and take it down to two? Why not have Buy Now and Add to Cart providing the purchaser with the option of making the purchase now? Bypassing the Proceed to Checkout option and going straight to entering my payment information would greatly increase my chance of making a sale.

2. Use a payment platform that makes sense.

There are lots of ways to sell products online, build websites, manage inventory, process payments, and facilitate your business. But all this costs money and all of them have various pros and cons. Many websites partner with companies like Stripe to facilitate payments on the backend of their website. While you may be able to get up and running quickly with something like that, in the long run, you may find the price you pay is too high and the support is too weak.

Find a merchant services company that can support you and your clients when something goes wrong. Something always goes wrong, and when that happens, you’re going to want support. Custom buildouts of your website and utilizing plugins and payment gateways provide you with a lot more options to find a better price and service when facilitating eCommerce transactions online.

It is important to understand the relationship between website building platforms, payment gateways, and payment processors. Website building platforms like Ecwid, WordPress, and Squarespace, enable you to control the front and back end of your website. Help you load products, build beautiful pages and often include the ability to integrate a shopping cart to service your ecommerce business.

While some website building platforms have a singular option for processing payments through their platform, many offer a myriad of gateways. A gateway provides the link between the website, and specifically the shopping cart, to the payment processor. Processors like Gravity Payments work with many gateways to ensure business owners have the largest selection of options available to them, so they’re empowered to operate their ecommerce business as effectively as possible.

3. Sell your product on Amazon

I know, I know, what am I talking about?

At the end of the day, Amazon can sell their products, and the products of your competitors on their site and you’ll miss out on creating brand awareness and revenue. But by competing within Amazon’s ecosystem, you can sell your products, enjoy the benefits of Prime Day or other sales experiences, and build recognition and awareness for your brand. The more awareness you have, the more social media followers you’ll get, and better control your messaging.

Use the awareness you receive on Amazon to build your brand in general. You can upload videos, product descriptions to your product pages on Amazon. You utilize these tools to not only sell your products more effectively, but sell your brand as well. Amazon can become a tool to build brand loyalty, and increase your ability to connect directly with your clients through social media and your website.

How Small businesses can fight with Amazon in eCommerce

Gravity Payments stands for the small business owner, by working to provide consultative and honest payment processing, both online and in-store. If you’re an independent business owner, wanting to save time and money on your processing, let us know.

 

Psst. Want more? should check out our comprehensive three-part guide on Competing with Amazon: 

ReferralCandy Guide: How to Compete with Amazon:

how to compete with amazon - referralcandy guide for ecommerce retailers

Part 1 – Why Small/Medium Retailers Should be Afraid of Amazon—and What’s Coming for Them

Part 2 – How to Beat Amazon: Amazon’s vulnerabilities and how Small Businesses Can Beat Amazon

Part 3 – Competing with Amazon: 4 Quick Wins for Small eCommerce Brands

 

Matt Dho

Why Small/Medium Retailers Should be Afraid of Amazon

how to compete with amazon - referralcandy guide for ecommerce retailers

Editor’s note: How to Compete with Amazon? In the first part of our three-part guide, we show you why Amazon is competing with you, whether you like it or not, and why you should be afraid.

Online selling is tough—that’s no secret.

However, the most common threat to small/medium-sized business isn’t just competitors.

Although you still need to compete with other businesses (like those that rank alongside you in the SERPs), eCommerce competition is heading in a new direction thanks to one retail giant: Amazon.

Compete with Amazon? Why Small/Medium Retailers Should be Afraid of Amazon Coming for Them

What started as an online bookstore in 1995 has become the largest eCommerce store on the planet—making up 43% of all online sales in the U.S..

Combine that with the fact the retail giant made over $178 billion sales in 2017 alone, and there’s no doubting that Amazon is transforming eCommerce entirely.

compete with amazon: amazon's exponential sales growth

Amazon’s sales revenue keeps growing exponentially. Via Statista.

Unfortunately, Amazon is taking over—and if you’re running a small business, you should be afraid of how many customers are ditching traditional online shopping habits to make the switch to Amazon-only purchases.

Here’s why:

Amazon is Worth More Than America’s 8 Largest Retailers Combined

Although it’s obvious to state that Amazon has tremendous eCommerce power, it’s startling to realize that one single website is worth more than America’s 8 largest retailers.

That’s right—Amazon has a bigger market share than JCPenney, Target, Macy’s and Walmart combined:

compete with amazon: ecommerce retailers amazon now has bigger market cap than 8 largest traditional retailers in US

Even with the lion’s share, Amazon is still hungry. Via Yahoo Finance

What does that mean?

Well, in a nutshell: Customers are changing their purchasing habits. Instead of heading to their local brick and mortar store for their products, they’re using the internet to buy.

Whether their reasoning was saved time or pure laziness, it’s something small eCommerce retailers need to keep up with if they’re looking to compete with Amazon’s power.

Amazon’s Membership Scheme is Killer

We all know the power of a strong membership scheme. Amazon is no different—and have truly mastered the power of creating a killer scheme that encourages previous visitors to stay loyal.

For the annual $119 fee, Amazon Prime’s 100+ million members can enjoy:

  • Fast, free delivery
  • Access to Prime original movies
  • Books ahead of their release date

compete with amazon: - amazon prime subscription benefits

Prime bundles streaming content, retailer discounts and more as benefits.

Ready to hear something shocking? According to Forrester Research analyst Sucharita Mulpuru, Amazon lose $1 billion every month by offering free shipping to their Prime members.

Committing to fast, free delivery to worldwide customers isn’t something small businesses can compete with.

But, the loyalty cultivated in their Prime membership mean Amazon can afford to lose out on this extra cash—considering Amazon Prime members spend $700 more than non-members, each year.

Editor’s Note: To grow membership, Amazon ran a best-in-class referral campaign for Amazon Prime, which we covered previously.

Amazon is Threatening to Kill Retailers in 10 Industries

That sounds harsh, right? What’s even harsher is the fact it’s true—Amazon is threatening to kill 10 major industries, and small businesses who’re trying to breakeven could bear the brunt of their power.

Businesses in the:

  • Electronics
  • Consumables
  • Department store
  • High-End Retail
  • Food delivery
  • Bookstore
  • Grocery
  • Healthcare
  • Pharmacy
  • Delivery & Logistics

…industries are most at-risk of Amazon’s global domination. Why? Well, because Amazon’s CEO, Jeff Bezos, wants his website to be an “everything store”.

And, by partnering with (or outright acquiring) other large businesses in each industry to offer even better products for their customers, you wouldn’t be alone if you’re fearing the power of Amazon’s joint ventures will impact your revenue.

Amazon Sell Everything…

Remember how Bezos’ wish was to turn Amazon into an “everything store”?

That’s a dream which is seemingly becoming true since their Departments tab has been edited to include the tagline, “Earth’s biggest selection”:

compete with amazon - can ecommerce retailers offer product catalogue this deep

Just 4 out of the 27 total categories in Earth’s Mightiest Store

Stocking everything from men’s razors to gym equipment, Amazon’s “sell everything” approach is winning-over customers through convenience.

Think about it: If you needed to purchase a razor and a treadmill, traditional online shopping would mean you’d have to go through the entire checkout process for two separate websites to make each purchase.

However, since Amazon stock both (with free delivery for Prime members), why wouldn’t you want to take the easy option and hand over your cash to the most convenient choice?

That, my friend, is why Amazon should be feared.

…and Consumers are Heading There to Start Their Product Searches

We all know the power of marketing on a small business. One of the greatest way to bring in new customers is to use SEO; a set of tactics that can place your website higher in your ideal customers’ organic search results.

But, that might not be the case for much longer.

55% of online shoppers now go directly to Amazon before checking any other site—including search engines like Google or Bing:

compete with amazon first search for ecommerce shoppers

Alexa, is Amazon the biggest search engine in the world yet? Via VentureBeat

That means you’ve got a smaller pool of people to target through your SEO techniques, and a tough job to position your business in front of potential customers in the early stages of the buying funnel.

You can’t target people through marketing if they’re avoiding the places you’re making your business visible, right?

They’re Rated #1 for Customer Service

A huge chunk of customers leave a company if they’re unsatisfied with the customer service they’ve received:

compete with amazon - customer service is key

Better CS also leads to more sales and referrals. Via GrooveHQ 

…But you already knew that, right?

Small businesses usually have an advantage over larger corporations when it comes to customer service because they naturally have fewer customers—generally resulting in fewer complaint issues.

What you might not realize is this: Despite their millions of products being shipped every year (and the potential for thousands of unhappy customers), Amazon are still rated #1 for customer service.

So, even if you’ve got tons of spare time to respond to customer dilemmas, Amazon’s customer service team do, too—and have perfected their customer service process to a T.

That’s no small feat.

Amazon Allows Small Businesses to Sell Their Products on the Site—But Charges For It39.99

As a small business, it’s likely you’ll already have tight profit margins. You want to attract customers with your affordable prices, but you don’t want to lose money, right?

That’s why many smaller retailers use Amazon’s platform to sell their own products—but it comes at a price.

$39.99 a month (plus additional selling fees), to be precise.

What does that mean? Despite this selling tactic being proven to help companies shift more of their products, their profit margins are massively reduced.

In short: You’ll have to strike a deal with the devil, and make more sales to make the same amount of profit.

Can eCommerce Retailers Compete with Amazon? Final Thoughts on Amazon’s eCommerce Takeover

Amazon is taking over the way we do eCommerce—there’s no doubting that.

The retail giant has such a tight grip over the way consumers purchase online, and that’s only set to increase as they gain even more market share.

Feel deflated? Don’t panic. Amazon’s takeover is huge, yes—but it’s not impossible to compete.

Next week. we’ll post Part 2 of our How to Compete with Amazon Guide, with ways for small and medium retailers to beat the Amazon giant, and snatching-up a small portion of loyal Amazon customers, one person at a time.

ReferralCandy Guide: How to Compete with Amazon:

how to compete with amazon - referralcandy guide for ecommerce retailers

Part 1 – Why Small/Medium Retailers Should be Afraid of Amazon—and What’s Coming for Them (you are here)

Part 2 – How to Beat Amazon: Amazon’s vulnerabilities and how Small Businesses Can Beat Amazon

Part 3 – Competing with Amazon: 4 Quick Wins for Small eCommerce Brands

 

Elise Dopson

Elise Dopson

Elise Dopson is a freelance B2B content writer for SaaS and eCommerce companies. Hailing from the rainy city of Manchester, you'll find her with a good ol' British cuppa tea.