Thursday 30 January 2014

Competing with Amazon

If you are starting an e-commerce firm, the first thing you should ask is how can you compete with biggies like Amazon? Obviously big players get large discounts from suppliers, in some cases from direct manufacturers.  Because of the large volumes of orders, they can save more on transporting, storing and promoting, and optimise many more things.  Your business model should tell how you can compete? What are your core competencies that  can compete with them. 

There are few thumb rules which can help you in making decision, or come up with ideas
  • What are the things biggies cannot do better?
  • What are the things you can do better than biggies?
  • If you cannot compete, then at lease can you co-exist along with them?
One important  quick tip is to research on the companies which were acquired by Amazon and investigate why? Study  e-commerce companies which are co-existing even in the presence of biggies, try to understand their USP.  We are listing few  such methods

Unique Business model 

Can you think about different model? It can help you to co-exist as you are avoiding the competation. Groupon, and  are result of that attempt only. Woot basically sells limited, offbeat products for limited period. Selling customized or personalized products or subscriptions also part of this.

Creative merchandise

Have you seen many websites which sell different 
T- shirts? Customre can select the image or quote and you can print it on the T-shirt and ship. Similarly coffee mugs and tea mugs which sell different articles.  Gifting selection is another interesting field.  One sample such site is Spreadshirt. offers creative and unique products which are readily not available in the outside market to purchase.

Launching your private label

Say you have some geographical advantage about sourcing few materials, or you have good knowledge of assembling or manufacturing different things,  then definitely you can think of launching your own brand. Bonobos is one of first such company. One very good talk about the same from the founder:

Selling niche segment products

Target a niche segment, focus on that. The best example is Finally, Diapers got acquired by Amazon. Either you will be a leader in that niche segment or you are going to be acquired by biggie because of large base of suppliers, vast categories and user base.

Can you sell as marchant on Amazon?

Yes, it is true. Intially focus as merchant, build your competency in suplly chain, procurement or manufacturer. Once you are done, got the best skills, slowly you can start selling from your own site as another channel. 



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