Want to Compete With E-Tailers Like Amazon? Here’s How!

Here's a look at seven key ways small e-tailers can give bigger online commerce sites a run for their money.

Amazon is such a huge presence in the e-commerce space these days that it can feel pretty futile as a small-time online retailer to attempt competition. If even Zappos can fall to a merger with Amazon, do mom and pop e-tailer’s even stand a chance?

My answer is: Yes! But the caveat is this: As long as you focus on what makes you unique and don’t try to copy the big box retail model. After all, it wouldn’t have made sense for a small electronics shop to compete with Best Buy in the pre-Internet age, and it doesn’t make any more sense now.

So, let’s take a look at seven key ways small e-tailers can give bigger online commerce sites a run for their money.


  1. Make Your Own Stuff

    Other than the Kindle, Amazon is in the business of reselling products, not making them. That means that if you develop your own products, whether or not you decide to have them sold by a reseller like Amazon is completely up to you. If you want to make your sales exclusive to your own e-commerce site and you believe in your ability to market and drive sales, then competing with Amazon isn’t even an issue. While some larger retailers like Gap do sell in Amazon, there are just as many examples of those who don’t, like Victoria’s Secret and Lululemon. Being on your own means higher margins and more control over pricing, so if can go your own way, it might just be worth it.

  2. Find Your Niche

    Amazon may have wide reach, but it sells more media and electronics products than anything else. So, if you can specialize outside of these areas, that’s probably a good idea. However, even if your product does fall within these categories, your small size is still a good differentiator; your niche can instead be your expertise. After all, with so many products to sell, Amazon can only provide so much information about each product upfront (e.g., that’s why they rely so heavily on crowd-sourced product reviews). To differentiate your e-commerce website, make each product page a full resource center, with in-depth information about each product and how to use it.

  3. Pay for Returns

    For customers, one of the nicest things about shopping on Amazon is the free (or cheap) shipping. Most small companies can’t afford it, however, so at the very least it’s a good idea to pay for returns. For customers this removes the risk of shopping with you. After all, no one wants to pay return shipping for a product they don’t even want. If it’s in the financial cards, consider using free shipping as an incentive for marketing campaigns instead to entice online shoppers with an “Amazon-like” feature, even if it only lasts for a short while.

  4. Show Off Products and Services

    To be truly successful in e-commerce you can’t pass up the opportunity to show off your products with photos and videos. Photos are essential because they give potential customers a glimpse into every angle, close up and far away. What’s more, they allow customers to inspect what they’re buying. Product shots are best done professionally on a neutral background and in soft, but clear, light.

    Online videos, on the other hand, are a great way to demonstrate all your product or service can do. This can include a YouTube clip of a customer using your product in an impressive situation or a step-by-step instructional guide for setup, tips or sizing.

  5. Create a Customer Loyalty Program

    If you’re like most people, chances are you shop with a credit card that gives you airline miles — and you like doing so, too. Well, the same kind of loyalty you feel to your credit card can easily be applied to an e-commerce store through a customer loyalty program. Whether it means discounting memberships, emailing VIP members with new product alerts, or providing free products or “cash back” for tiered spending, a loyalty program fosters good will — and that’s bound to improve customer retention.

  6. Compete with Customer Service

    When it comes to products fulfilled directly by Amazon itself, the site is world renowned for customer service. Thanks to Amazon’s excellent grasp of big data, they can sometimes even predict what a customer is calling about before the customer states it — and when they don’t, customer service reps can easily pull up a customer’s detailed profile to provide a personalized response.

    While you won’t be able to compete data-wise with Amazon, making sure you have excellent customer service is key to remaining competitive. For example, the customer is always right; always accept returns (within your store policy time-frame); maintain a team of highly trained, empathy-driven customer service reps; ensure there’s always someone on the phone for customers to talk to. You get the gist.

    In a more modern sense, it’s important to remember that customers now have many digital ways to get in touch with you and it’s your job to make this easy for them. One pitfall I often see is, say, setting up a Twitter account for marketing purposes, and not realizing that customers will try to receive service through that channel. In fact, it’s better to have no Twitter account at all than to leave an angry customer who’s tweeted at you hanging. This ideology applies to all social media channels.

  7. Make your Website User Friendly

    Last but not least, your e-commerce website must be easy to use. This means all key information should be simple to find, a robust search engine, and as few barriers between browsing and checkout as possible; with multiple forms of payment options. If that sounds like a lot, that’s because it is — if you design it from the ground up. But you know what could really streamline that process? Amazon — webstore, that is.

    Not to be confused with the marketplace itself, Amazon Webstore is a platform used by many third-party vendors to establish their own e-commerce stores. While there is certainly the option to add products to the Amazon Marketplace, instead the idea is to provide all of the same tools you see there to third-party vendors, including things like a shopping cart and suggested similar items. This gives first-time e-tailers Amazon functionality with the autonomy of their own site. In that way, the best way to compete with Amazon is to use Amazon.


There are many ways to compete effectively with Amazon in the e-commerce space, but did you notice one factor we didn’t mention? Price. Just don’t even try. With so many other ways to compete, stick to the angle you’ve got: you’re unique, high quality, specialized and you love what you do. If that’s not a formula for success, I’m not sure what is.


This article has been edited and condensed.

Rob Toledo is a marketing consultant in the Seattle offices of Distilled. Outside of work he enjoys mountain climbing, creating a mess in the garage, and always keeping his ear on the ground for the next big thing on the web.


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