Competing with Amazon

If you have read my free report on picking a product to sell online, you know I give a strong warning about trying to compete with Amazon. Amazon is a huge, huge beast that is swallowing up more and more of the online retail world every year. If you are in internet retail, you had better take them very seriously and you had better know how you are going to compete with them.

Don’t think for a second that it will be easy. It might be tempting to say that you can provide better service than Amazon, but can you really do that? Amazon is no slouch in the area of service. The backbone of customer service is simply processing orders and delivering them quickly and accurately. Don’t kid yourself: Amazon does the process well. They have fulfillment centers everywhere so they can deliver almost anywhere in the US within a day or two and they don’t make many mistakes. They have processes in place to handle returns easily and they have armies of customer service reps to handle calls when things go wrong.

Not only does Amazon carry out the process well, but they also have enormous advantages in cost. For example, they can ship for a fraction of what it will cost you to ship. Unless you pack your own orders, they will pack orders cheaper than you can. Unless you answer your own phones, they will be able to do that cheaper, too.

Is it possible to compete with Amazon? Yes, it is. You simply have to understand that their greatest strength is also their biggest weakness. Their strength is their size which provides them with the vast backbone of warehouses and inexpensive fulfillment cost. Their weakness is also their size, and this is the reason. Because they are so huge and trying to sell literally everything in the world that can be legally sold, they are not able to provide a shopping service that is customized to all the various niches they sell in.

Let’s take the example of makeup. While Amazon sells makeup, they simply do not have the ability to provide a website customer experience that allows customers to compare different makeup and make intelligent choices. They do not have the ability to have phone representatives trained in makeup. They can’t even include the kinds of specialized inserts in packages that a makeup company can. All they are going to do is sell makeup on a transactional basis; but a smaller company focused on just makeup can provide a much better experience that builds longtime loyalty.

If you want to sell something that is also available on Amazon, you have to keep that in mind and find a way to capitalize on that weakness. If you simply look for ways to compete with Amazon on price, you can forget it; you will lose. However, because you can provide an experience that Amazon cannot provide because of their size, you can beat them badly. Millions of companies (including mine) are proof of that truth.

 

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