Can you take on the big boys? By this, we are referring of course to our old friend Amazon.
As we all know, Amazon is big, not just big it is huge and has taken on a massive segment of eCommerce worldwide. According to Statista, in the US Amazon will dominate and own 50% percent of the entire e-commerce retail market’s gross merchandise volume in 2021. Will it continue to grow? Who knows but it certainly looks like it.
In this blog we are not looking to demonise Amazon because of its size but look at whether or not you can compete with it and the others like Google, Etsy, and eBay by building your own website. We will start first with the pros and cons of Amazon as we see them and then see what you can do about building your own independent online shop.
The Pros and Cons of shopping with Amazon
When you shop with Amazon, what are your prime motivations?
Q: Will I get my package quickly?
A: Yes, sometimes next day and soon to be same day delivery for some products.
Q: Will I have to pay for postage?
A: Not if you are a Prime member. For £70 a year you can get almost anything delivered for FREE. Plus you get a whole lot of other stuff thrown in like movies, books etc.
Q: Will I have to hunt around the internet to find what I want?
A: No, you can find almost anything in seconds using the best-in-class search and navigation functions of the website or app.
Q; What is customer service like?
A: Customer service is very good. Why? Because when Amazon started, Jeff Bezos decided to put the customer first. Everything starts with the customer at Amazon, which may be part of the problem. In trying to help the customer have such a good experience, it doesn’t always lead to happy sellers.
There are quite a lot of reasons for shopping with Amazon not least because they try to help you make purchase decisions, everything is about making your journey easier. e.g. Customers who bought this item also bought this! They also conduct regular surveys to find out what you think.
Take a look at the above picture, my feed looks completely different to yours based on my shopping history.
They always ask for a review and were one of the first eCommerce companies to do this. Giving consumers the power to tell others what they thought. Amazon doesn’t care if reviews are negative, it helps them to filter out the products that sell and won’t require a return or refund. There are so many sellers that good products naturally rise to the top.
Why Sell on Amazon?
Amazon has built something beautiful, a marketplace for anyone to be able to sell their goods to a vast targeted audience. What more could you ask for? Getting your business off the ground is hard enough when you have found the right product. What you have to do next is work out where to store it, how to deliver it, what to do about returns and of course how to get it in front of new customers.
Amazon can take care of all of this for you, at a price of course. But is it the right price? Can you really try and compete with a giant who can deliver your goods for next to nothing within 24 hours. Do you want to be paying warehouse bills and Adwords PPC costs. If you don’t then Amazon might be for you, as long as you have enough margin of course.
What does it cost:
With the Individual plan, you’ll pay 75p every time you sell an item. The Professional plan costs £25 per month, no matter how many items you sell. For both plans, Amazon also collects a referral fee on each sale, which is a percentage of the total transaction and varies by product category. Visit our pricing page for a summary of selling fees.
From the Amazon Website
Why Reconsider Selling on Amazon
What they don’t tell you is what might happen if you are successful. Think about who owns your customer? Is it you or Amazon? Who holds all the data when it comes to that customer, how well your products sell compared with others and who else might be interested in buying it. It isn’t you!
According to the Wall Street Journal and Business Insider Amazon might find out what products sell well and then making their own brand of it and promote back to what you thought were your customers. It makes perfect sense. They let you take all the risk and if it is a success they can just replicate your business and start selling to an audience that they know is interested.
Can you cross sell on Amazon? No but they can, most product suggestions are from other retailers. They may buy one item from you but find the other part from another seller. If you had you own website you could control this and upsell other items too.
Customer data is one of the most important parts of any business and if you don’t have any then you really don’t have much of value. With all of the tools now available to you, you can begin to behave a bit more like Amazon and cross sell to your database. Email marketing to your database can produce an large part of your income once your database is big enough.
How can you compete with Amazon?
We think you can compete with Amazon as long as you know what you are doing and have considered the pros and cons of using a marketplace. We might go as far as to suggest you create a hybrid selling model and use both marketplaces to grow your audience and a website to build a relationship with them once you have them.
One of the biggest benefits of Amazon is that they have led the way in improving the eCommerce experience. Without Amazon, we would probably still be buying products without the safety of peer reviews. Delivery times would be slow and expensive and customer service would have remained terrible. What is happening rapidly is the ability for small businesses to begin to be able to compete in all of these areas.
Building an online Shop for your business is now cheap and easy. Using platforms like Shopify, Wix and WordPress means you can get up and running quickly. They all have a series of plug ins and themes that let you replicate some of Amazon’s best bits.
Follow the leader
Where Amazon has led we all now follow. Sections like the search bar have pride of place at the top of Amazon’s website. Where do you think yours should be? Don’t forget you can optimise your search results using your website back end.
If you don’t have a good customer service plan then you may as well pack up and go home, or sell on Amazon. We know customer service takes time and money, but there are ways to do it. Live Chat is still not used nearly enough in our opinion. There are a multitude of options out there including integration with Facebook Messenger and Whats App, Shopify Ping and Tidio (our preferred app). You can set up bots to look after the obvious questions, like opening hours, Size guides etc.
Amazon use email a lot. Always asking for your thoughts on a product, asking for shopping feedback and more. Have a look at the image below. How many emails have I had from Amazon in the last 10 days. More than 1 a day and it is almost all automated ranging from reviews, to suggested books to order confirmations. You can do this too, using tools that come with most website builders, or old favourites like Mailchimp etc. Our recommendation is Klavyio which allows you to do everything Amazon does and more.
As we previously suggested, reviews were brought about in large part thanks to Amazon. You can now run your own review programme and it doesn’t have to just be on Feefo. There are lots of apps available that give you a lot of power. Best of all you can automate the whole process and tie it in with a reward scheme. Look at our image-led reviews on Dogs Dogs Dogs our very own pet shop. We use Loox app available on Shopify for a fee.
What about delivery and warehousing? Well, that is up to you in terms of where to keep your products, but you can try and compete as long as you manage expectations. Be clear with your shipping options as to what the customer can expect. Free shipping by Amazon is hard to compete with but sometimes, free shipping is what converts your customer. Set it at a high enough level that you will still make money. Most customers are astute to know this.
Bigger Shopping Baskets
If you sell on Amazon you are only likely to sell single items. Shoppers may think it all comes from one place but they may actually be buying from multiple sellers, so how can they be assured of a quality product. When they come to your website, you have the chance to make them buy more and increase the size of the checkout. Almost all website builders will let you add other interesting items to products. Don’t miss a trick with this. You can also download and use apps that suggest other products at the basket. One of Amazon’s weaknesses is bundles, so don’t forget to create interesting packages that are only available on your website.
Make it personal
One thing you can be sure of and that is a shopping experience with Amazon isn’t very personal. Yes you feel loyalty, but is there a personal relationship there. As the saying goes People buy from People, but is it true with Amazon?
We believe this is the easiest way to win customers, make it personal. Generate a relationship with your customers that they won’t get at large stores. Copy Amazon, put your customers first. When you start up, you might even have time to give them a call. Offering great customer service is an easy way to do this by building trust. If something goes wrong, all hands on deck. Make them feel special by going out of your way to help them. They could go from being a pain in the **** to your biggest sales person.
Yes, Amazon’s website is amazing, but two things stand out. Navigation and speed. Most website builders come with themes that mean you can replicate the look and feel of your favorite websites. They also come with the chance to offer mega menus, like those used by Amazon. Spend time looking at Amazon;’s navigation options. There are three main menus to do with finding products and of course the ability to find old orders and manage your account. The biggest space up there is the search bar. Don’t forget to build your website with different types of shopper in mind. Those that will go straight to search, other like to hunt around and see what takes their fancy, while the third cohort likes to find their own way.
Speed is another matter and may require professional help. It is a key part of the SEO battle and should be considered as a priority at all stages of you website build and updating of products.
What is stopping you. Build a website now to start looking after your customers and building your own database that you can nurture with the tools we suggest. Stick with Amazon and use it to build a list of cusotmers. Don’t forget to put a note about your website in every package you send. Give them discounts so they come and say hello. The discount may be half of what you pay to Amazon anyway so you aren’t losing money. Experiment on your own website to see what works and what doesn’t without worrying about who owns that data.
If you want to talk about how we can wean you off Amazon, then give us a call and together we can build something amazing.