How to Compete with Amazon Online
When it comes to e-commerce, Amazon is the first word that comes to mind for many. Founded in 1994 by president and CEO Jeff Bezos, it sells every product you can think of, including clothing, cosmetics, electronics, books, and toys. Additionally, Amazon offers streaming video, grocery delivery, smart home products, and cloud hosting. The company generates an estimated $232 billion in sales each year and controls 45% of the market share — and that’s just in the U.S.
While the company continues to gain momentum in the online marketplace, it continues to have major competitors in each category it operates in. Netflix continually tops the charts when it comes to video streaming, while Google Home products outsell Amazon’s Echo products. This gives promise to online retailers hoping to enter a highly competitive online marketplace. Although Amazon continually ranks high in overall sales, there are several major retailers that have continued to thrive in the e-commerce community.
Competing with Amazon in a Cutthroat Marketplace
All bets are off when it comes to online selling. While Amazon’s market share is huge, it’s not unheard of to see small, unknown retailers swoop in and climb the ranks in specific sales categories. Just the same, major retailers still maintain a massive share of the market in other categories.
Here are some of the top competition Amazon is facing today:
Online Stores with Niche Products
There are millions of e-commerce sites conducting sales transactions every day. The successful shops tend to focus on a unique product catalog, a particular consumer segment, or offering a better version of an existing product. Individualized service, a greater range of product knowledge, and an overall quality user experience can increase consumer confidence and loyalty, bringing your business ahead of the competition.
AliExpress and Alibaba
AliExpress and Alibaba are Asian companies that provide wholesale, low-cost goods in a broad range of product categories. While AliExpress is available to all consumers, Alibaba’s business is focused on providing wholesale goods to businesses across the globe. The company had 755 million active users as of June 2019 and continues to grow. On November 13, 2018, which is known as Singles Day in China, the company sold more than $30 billion in product.
Walmart is king when it comes to brick and mortar retail stores, and its online presence isn’t far behind. The company ranks second in the U.S. when it comes to online stores and sees an estimated 40% in sales growth each year.
Otto is a European-based online marketplace with a product range that’s similar to Amazon and Walmart. The company deals in brand-name merchandise in categories such as fashion, housewares, and electronics. While the company’s sales don’t come close to Amazon’s yearly revenue, in 2019 it generated an estimated $3.8 billion in sales.
Newegg is a successful online retailer that focuses on providing electronics, such as laptops, TVs, and cameras, at an affordable price. The company generates an estimated $2.7 billion in revenue each year, which shows its ability to compete with Amazon in the electronics space.
Flipkart was founded in 2007 and in 2018, the majority of its shares were acquired by Walmart. While the company is still young, it boasts more than 100 million users and was valued at an estimated $22 billion.
Rakuten is a Japanese company that continues to acquire e-commerce companies at the speed of light. The company has recently added Ebates to its roster, which connects consumers with discounts and cashback for shopping at retailers directly through its app or website. The company has also taken over e-commerce sites such as Play.com, PriceMinister, and Kobo.
eBay is the original online consumer-to-consumer marketplace. The company has long been a place where consumers sell their unwanted goods to others, but in recent years its evolved to allow business-to-consumer transactions and in terms of site visits, the company now ranks second in the U.S.
How to Compete with Amazon
Considering the examples above, it’s easy to see how many companies can compete with Amazon when it comes to specific categories, and in some cases, even overall sales. Many small businesses and start-ups have successfully built recognizable brands that compete with the biggest players in the online market. Here are a few tips to get your business on the path to success:
• Create a consistent, recognizable brand
• Retain your customers with customer loyalty programs and follow-ups with previous buyers
• Build a database of customer emails and engage in email marketing
• Use techniques such as keyword research, link building and category descriptions to build an SEO-rich site
• Make sure that your website is user-friendly and promotes a positive online experience to visitors
• Don’t be afraid to offer deep discounts occasionally, but make sure your profit margin is reasonable
• Prioritize conversions over traffic
• Make it easy for your customers to return items they’re not satisfied with
• Offer free, two-day shipping
• Promote and sell your products across multiple online marketplaces
There are a lot of things Amazon is doing, but there are marketing & acquisition channels that Amazon does not do well at such as email & content marketing. This is an area where you can shine and set your business apart.