David vs. Goliath: How Your Small Business Can Take Down the Amazon Empire

More and more small business owners are facing an uphill battle to compete with Amazon. Check out this article to learn how you can take advantage of holes in the ecommerce giant’s armor.

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The battle between David and Goliath has entered the online arena.

In this corner, we have David, a highly motivated and savvy small online business owner. In the other, we have Goliath, a highly powerful and heavily funded ecommerce giant.

With billions of dollars, thousands of workers and a behemoth brand name at its disposal, Amazon is, without a doubt, the biggest player in the industry. In fact, after acquiring Zappos and heavily investing in LivingSocial, one could say that Amazon has indeed established itself as an ecommerce empire.

So how do you, the little guy (or gal), compete with Amazon when it’s calling the shots?

It’s simple – take a page out of David’s book. Here’s how:


Accept that Amazon is the 800-pound gorilla

Just like David understood Goliath to be a formidable opponent, you too should accept that Amazon is a mammoth player. By accepting and understanding the magnitude of Amazon’s presence, you’ll be better equipped to leverage your own strengths on the battlefield.

From millions of customer reviews to millions of advertising dollars, Amazon has a slew of resources that propel its success. By understanding what Amazon has that you don’t, you can start drawing up a battle plan that promotes your strengths while exposing Amazon’s biggest weaknesses.

In other words, David didn’t try to muscle up to be more like Goliath – instead, he grabbed his handy slingshot and went with what he knew best.

 

Embrace being small

Thousands of years later, people still tell the story of David’s victory. Why? Because he was small. And people like other small people (trust me, I barely clear 5’8”), especially when they’re facing a larger opponent.

In terms of modern consumer behavior, we’re seeing a trend in which shoppers like to purchase from local, smaller merchants – it gives them a sense of fulfillment by helping the economy and giving something back to the community. This presents a perfect opportunity for you to embrace your role as a small business and use it to your advantage.

To get started, here are some simple ideas to help showcase your smallness:

  • Beef up your About page: Your About page is the perfect canvas to paint the picture of small business bliss. Detail the story of how your business got started, list your inspiration for opening your online store and add pictures of you and your team to make a close, personal connection. As a bonus tip, if you can include your mission, you can really tug at the heartstrings (and purse strings) of customers who want to help a smaller operation.
  • Add icons to your site: Are you a member of the BBB or local Chamber of Commerce? Show it off by adding icons to your template, which lets customers know that you’re small and reputable. Or, you can add a callout within your template or checkout page that says something as simple as, “We support small businesses.” This approach will give online shoppers a last-minute reminder that they’re supporting a good cause before purchasing.
  • Be transparent with your products: Let customers know exactly where you’re products come from and what they’re made of. Whether they’re “Made in the USA” or are built with your own hands, showcasing the product creation process makes customers feel more connected to your products. After all, customers have no idea where Amazon sources their products from or if they were made under ideal conditions.
  • Showcase your start-up culture: The name of the game is to make a personal connection between your small business and your customers. What better way to do that then sharing images of you and your team? Dating back to David’s time, people have always preferred to buy from people they trust, and by highlighting your team behind the scenes, you’re establishing that all-important credibility.

Being small is powerful – don’t be afraid to use it to your advantage.

 

Personalize the experience to establish unwavering brand loyalty

I’ll speak for myself here, but I’ve rarely met someone that shops with Amazon because they’re in love with the brand. Convenience, product selection and low prices, yes, but brand loyalty, not so much. This means that if you can become a fan favorite with your customers, you’ll have a major advantage over Amazon and other big-time retailers.

Personalized brand experiences serve as the best mechanism for your small business to establish this type of unwavering loyalty. If you can make customers feel like they’re your only priority, you’ve upped the chances of having them return to your site.

Here are some ideas on how you can truly personalize your customers’ experience:

  • Work your loyalty program: Once you launch your customer loyalty program, follow up with your members by sending emails that have special coupons, discounts and product announcements. These folks are typically your most loyal, repeat customers, so go the extra mile to make them feel like VIPs.
  • Pull out a pen: Hand-written notes go a long way, especially since we rarely see them anymore. Depending on your order volume, consider including a short thank-you note in each shipment. Or, if you don’t have time for that, write out an appreciative card each month to your most valuable customers.
  • Stop with the generic emails: No one feels special when they receive an email that says, “Dear Customer.” Instead, take the time to insert the first name of customers in your messages, particularly with transactional emails.
  • Make product recommendations: If you’re truly looking to upsell, suggest particular products to different customer segments based on their previous purchases. Your shopping cart software likely has some sort of functionality for this, and if not, you can always do some data mining on previous orders to draw conclusions of your own.

Despite Amazon’s large team of customer service reps and its epic marketing budget, nothing can replace a personal connection between buyer and seller. By taking the extra time to truly make your customers feel appreciated, you’ll establish a strong bond that grows into unwavering brand loyalty.

 

Focus on product specialization and expertise

Imagine this scenario: you find a beautiful piece of art that would look perfect in your living room. Before you buy, you have the opportunity to speak to the painter. She introduces you to the piece, details her inspiration and walks you through each brushstroke. Once her detailed explanation is over, you have the ability to ask questions and shake her hand. After it’s over, you have a much deeper appreciation for the product now hanging in your home.

You can provide this same type of product appreciation to your customer base by showcasing your expertise. To do so, try the following:

  • Launch a blog: Beyond its SEO benefits, launching a blog that’s focused on your products and industry is a surefire way to boost your credibility. Write various posts that highlight the history, context and benefits of your product. Or, if you make products yourself, build posts that detail the step by step process behind their creation. If neither of these ideas apply to you, create posts that demonstrate the lifestyle that your products and brand represents (this is particularly helpful with apparel and fashion). And while you’re in the early stages of blogging, leverage tactics to get people to actually read your blog content.
  • Create an FAQ section: To extend expertise to your website, create an FAQ page that details questions such as, “What is the history of this product?” “What is the cultural impact of this product?” “How does a specific ingredient of this product make a difference?” Also include customer benefits within these answers so you strike a balance between being a salesperson and subject matter expert.
  • Openly solicit customer questions: What better way to showcase your expertise than to answer questions? Invite customers to ask questions by prompting them to leave comments on your blog, or updating your Facebook status to accept inquiries from your fans. Once you respond, you’ll create a true sense of trust with certain individuals and the masses.
  • Produce product videos: Product videos serve as a proven sales tool to boost conversions. In addition, they also help customers better understand the process behind a product, as well as its benefits. Get started by incorporating videos into your product pages, and then transcend them onto your blog and social media channels.

It would be next to impossible for anyone, even a Goliath, to demonstrate true passion and expertise for a product line that ranges from art to janitorial supplies. Take advantage of this chip in Amazon’s armor by beefing up your informational arsenal, and work to share your dedication with your customers and the world.

Support a worthy cause

David’s camp truly believed that he was fighting the good fight, which is why it’s such a legendary story to this day. Your small online business can do the same by supporting a worthy cause, whether it’s a charity, non-profit organization or other cause that you believe in.

If you’re new to working with charitable causes, give these ideas a chance:

  • Find a cause that relates to your brand: If you sell pet supplies, donating a portion of your profits or time to the ASPCA would be a good fit. Or, if you’re selling home décor, making a contribution to Habitat for Humanity is a wise choice. Whatever the case, find a cause that fits with your brand, and more importantly, is one that you and your customers believe in.
  • Showcase this cause on your site: Throughout your website, particularly on your checkout and order confirmation pages, remind customers that a portion of their purchase helps support your chosen cause. Include links to information about the organization you’re supporting, and include another “thank you” message in their order confirmation email, if appropriate.
  • Follow up by communicating your contributions: Once you make your donation or spend time volunteering with your non-profit organization, include these activities in your customer communications. For example, you can include a summary in your customer newsletter, write a blog post or share a photo album on social channels.

Supporting a cause that’s dear to you and your customers reinforces the same advantage your small business has over the Goliath: customers want to make purchases that make them feel better about themselves.

Don’t compete on price, but do what you can

Because of Amazon’s huge popularity and limitless product offering, they can afford to accept razor-thin (or even negative) profit margins to provide low prices. This means that if you’re hoping to compete against Amazon on price, you’ll be facing a steep uphill battle. Despite this challenge, you can still find ways to help reduce prices to stay competitive.

Doing so comes down to cutting costs, and yes, doing some math:

  • Work with your suppliers: Establish a close relationship with your product suppliers to see if there are any discounts that you’re eligible for. Don’t be afraid to ask them if there are any savings by ordering products in bulk. Or, when talking to your shipping providers, ask if there are any cost efficiencies you can obtain by utilizing other services they might offer.
  • Make a list of wants and needs: Even the smallest business on the tightest budget has a little excess spending they can trim. Get started by creating a list of the bills you must absolutely pay to keep the lights on. Then, create a list of other expenses and think of creative ways to either remove or reduce those costs.
  • Look at individual profit margins: Just like Amazon, there are some products that provide much higher margins than others. If that’s the case, ask: “Can I accept smaller margins on some products to encourage my customers to purchase more products as a whole?” Taking a look at these numbers is helpful in increasing your average order value (AOV), which collectively gives a bigger boost to your bottom line.

The main idea here is to reduce your prices enough so they’re somewhat comparable to Amazon, while leveraging your overall added value to justify the extra cost your customers might encounter. Remember, David didn’t need an expensive bow and arrow to take down Goliath – all he had was a few stones and his sling. Pick the right tools, and you too, have a fighting chance.

 

Believe you can compete with Amazon

Just as David trusted in a higher power to help him fight Goliath, you need to believe in your inner entrepreneur to help compete with Amazon. If you accept a defeatist attitude that “Amazon is too big, I can never do it,” you’ve already lost the war.

Instead, celebrate your victories, reflect on your losses and always look for ways to improve your small online business. After all, you’ve worked hard to get where you are today, and you’re bound to reach new heights as you continue to climb the wall of success. Don’t give up, don’t give in, and don’t get down on yourself.

 

Competing with Amazon is no easy task – it requires diligence, hard work and savvy marketing. But just because it isn’t easy doesn’t mean it’s impossible. All you have to do is take advantage of the bountiful benefits that come with being a start-up organization.

It’s good to be small. Just ask David.

Happy selling!
-Matt Winn, Volusion

About 

Matt Winn is Volusion’s Senior Brand Manager, where he helps oversee the organization’s branding and communications efforts. Matt has created hundreds of articles, videos and seminars on all things ecommerce, ranging from online marketing to web design and customer experience. Beyond being a certified nerd, Matt is an avid college football fan, enthusiastic home cook and a self-admitted reality TV junkie.

11 Responses to “David vs. Goliath: How Your Small Business Can Take Down the Amazon Empire”

  1. Landon - thompsonshoesonline

    Thanks Matt, great advice!

    Reply
  2. Brenda

    As always, Matt, you have hit the mark with your article! I believe that small businesses do have the power to compete with Amazon.

    Reply
  3. Max Tyler

    Thanks Matt for a breath of fresh air! We tried eBay and shied away from Amazon because of the cost. eBay was fine when we started but soon cut-price merchants moved in at which stage we moved out and started making more money. Our eBay shop is now basically an advert for our Volusion site, and we don’t have a spoon long enough to sup with Amazon. We’re already witnessing the death of some discount merchants, and although it’s a tough time we have just experienced record-busting Christmas and January periods. Our experiences on eBay saw us a lot busier, but making less money. Go figure!

    Reply
  4. Brian Goulet

    Thanks for this, Matt. I can personally attest to the benefit of product specialization and expertise. I literally spend 90% of my time doing all 4 things you listed there (blog, videos, FAQ’s, and customer suggestions). The one HUGE thing that I think is missing from your article that is absolutely critical right now with business of all sizes is engagement with the community. Social media outlets like Facebook and Twitter are good places to start, but just about every niche has a host of forums and blogger/YouTube stars out there that are talking about the products you’re selling, good and bad. The single best thing that any business owner can do is to find where their niche fans are talking, and join in on the conversation. Your fans and customers will tell you what they do and don’t want to buy, who your competitors are, and why they buy or don’t buy from you. Sometimes it’s brutal to hear their reasons, but if you engage with them and make changes as you’re able to benefit the people who want to buy the things you sell, then you’ll win out in the end…even over Amazon.

    Reply
  5. Anthony

    Matt, thank you for the breath of fresh air. Echoing the recent comments, competing on price is just a race to the bottom. About 4 months ago we created a Seller account on Amazon though it’s hard to be competitive when other sellers of the same product (including Amazon) decide that they can live with razor-thin margins. Loss-leaders have a purpose but Amazon seems to go to the nth degree. And that’s before they take their commission. There are customers who appreciate hand-written Thank You notes and even chocolates (be careful when shipping to warm climates). We’re about to do a direct mail campaign to past repeat customers with a discount incentive to bring them back. It’s not a slam dunk though it’s less expensive than our PPC campaigns and we’re simply mining our existing customer data. Here’s to keeping at it. Again, thanks.

    Reply
  6. Dave

    Stop supporting Amazon by being a seller on Amazon. I run accross many business owners that complain about Ebay and Amazon yet they still support those sites by selling on them. I stopped selling on Ebay and Amazon many years ago and although my volume has decreased my bottom line is much better. I make more now than ever before selling on the auction sites. I also have more time to spend on my own business instead of building Auction sites customer base. Best way to beat Amazon is to kill it by not using it.

    Reply
    • Mary Ann

      Amen, Dave! Integrating your products into the Amazon marketplace is like handing your products to your top competitor and saying, “Go ahead – you can do a better job selling this than me.”
      I’m not sure what Volusion thinks they’re offering their customers with the new integration feature, but it’s not help in building a brand – that’s fir sure!

      Reply
  7. Maria

    I really think Volusion should step up its game and integrate checkout by amazon and product feeds so that its customers can take advantage of amazons platform and not try to compete against it. This article leaves third party selling out which is almost 1/3 of amazons sales a year. When will you integrate with amazon?

    Reply
    • Gracelyn Tan

      Hi Maria! You bring up a really good point. I’m not sure what our product department has in the works, but I think it would be wonderful if you let them know! You can do that at our ideas page, where our development team takes suggestions for features and other parts of the software. Thank you for your input, and thanks for reading! -Gracelyn T.

      Reply
  8. Jim

    I have always believed that there is no future in selling products that anyone else can sell. If you sell based on price you will almost always be beaten by the big guys since they buy (and can sell) in much greater volume. If you cannot add value to a product in some meaningful way for the customer they will always go for the lowest price.

    Reply
  9. Mary Ann - The Gourmet Online

    Thank you, oh thank you! I really needed this today. After 5 yrs. of selling in the Amazon marketplace, we are finally pulling our goods off their site. For a long time they served as as way to mine for new customers., but as you aptly put it, no one shops there because they love Amazon. They’re a particular type of customer that has no sense of loyalty and a sense of entitlement because of Amazon’s “A to Z guarantee”. For every savvy customer we’ve had in their Marketplace we’ve had a dozen malcontents who expect free shipping, never read our policies on important things like shipping & returns, and then go on Amazon and thank them for bringing in the product! The typical Amazon customers are simply looking to save a buck – not develop a relationship, and they don’t care who they shop with.
    You’re right – customers are starting to miss that part of the shopping ritual that makes them feel good about what they buy. Educating potential customers through a variety of channels is out next step, since we’ve been doing things like free tissue wrapping, hand written notes, and personalized follow up emails since day one. Wish us luck!

    Reply

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