Welcome my fellow eCommerce Entrepreneurs! My name is Matt Edmundson and this show is for those of us Kurious About eCommerce and want to know how to get better at digital business.
Coming up in today's show we’re going to be talking about how we can compete with the giant of the digital world, that is Amazon.
Let's face it, Amazon is at the top of the food chain when it comes to the eCommerce marketplace. There is no doubt about it. From it's humble beginnings in the garage of Jeff Bezos 25 years ago to an annual excess of $230 billion with more than 647,000 employees, Amazon is huge and it is a Goliath of an eCommerce business.
And it isn't showing any signs of slowing down. CNBC recently reported Amazon's plans to take on the Indian market. They've got plenty of hurdles to overcome but it'll probably only be a matter of time before they resolve those issues and take their place as the dominant player in India's economy.
As they grow and take on other countries, markets and industries, we have got to ask ourselves, do we actually stand a chance?
eCommerce is only 10% of overall retail sales. The retail business is a $5.5 trillion business and only 10% of that is online. In the next decade it will jump to 20% to 40% and no one company can serve all those customers and all their needs. This is a great time to be starting eCommerce businesses.
2) We compete like a Digital David.
If you are familiar with the old Sunday school story of David and Goliath, in your head you will have a picture of this giant who is a champion, and is head and shoulders above everyone else. He is complete monster of a man and he is so intimidating that not one from the Israelite army is willing to go up against him. David, a shepherd boy, is the only one who volunteers. King Saul gives David his armour for battle but David takes it off because it doesn't feel right and instead chooses to slay the giant with what's familiar to him - stones and a slingshot.
Malcolm Gladwell has written a great book called David and Goliath in which he talks about how to overcome giants. He explains how David is cool because he's unique, he's authentic and he knew what would work for him. He wasn't going to pretend to be a warrior in the King's armour. He chose to go with what was right for him - five stones and his slingshot.
This is how we Digital Davids compete - with what's authentic about us and with the tools we have.
Here are my five stones:
Stone one: Customer relationships
Amazon cannot create the relationship with customers in your niche that you can create. They just can’t. They are too big and they don't have the people, the resource, the drive, or the knowledge to create that relationship that you can have with your customer. We have to understand that our customers hold all the cards. They can choose to spend their money with us right here, right now, or choose our competitor half way around the world. As a business you need to get to know your customers by listening to them, anticipating what they need and solve their problems for them. Like David we can be quick and agile and adapt to the needs of our clients.
By investing heavily in your customer you can earning their trust and loyalty.
Amazon isn’t personal on any level. It’s totally transactional. People buy with their emotion and so you have the advantage of being able to appeal to your customer’s emotions by being remarkable and awesome their eyes.
People love values. Other than speed and convenience, I am not sure what values Amazon does have. There is a whole host of tax issues with them, they are no longer the cheapest and the fake reviews are creating credibility issues for them. All these crevices can be exploited and can work in your favor.
Stone two: Shipping
May sound odd but shipping is one of the key points about Amazon. They have totally nailed it with speed and convenience. But what they aren't able to do because of their sheer size, is be personable to their customers. Their packages are delivered in standard boxes and are a bit boring.
Stone three: Play a longer game
3% of people buying online know what they want and are ready to buy. 1.5% of these customers go to Amazon where they search for the product they are looking for, sift through the options, pick one and click buy now.
97% of those who don't go straight to amazon usually are the ones who 'don't know what they want but want to something'. They have a problem and they are trying to figure what they need to solve it. These customers need businesses in this specific niche who offer free how-to-videos, blog posts, content, tips and tricks on how to do things.
Most buyers are in this category. If you find them and connect with them, then in the long term they become some of your best clients.
Stone four: Be known in your niche
Amazon's niche is 'no niche'. They sell to anything to anyone and everyone.
But Amazon can't be everything for each niche so do the opposite and create a niche to sell in and become the expert. Meet the demands of the customer by having all the product knowledge and the content and the how-to-videos so that they wouldn't even consider taking their business elsewhere.
Focus in on the needs of the buyer. For example, if I was selling niche fountain pens I would make sure I have the best content, the best how to videos and the best up sells for people looking for fountain pens. I would also offer the best curated bundles of pens with the perfect ink and the perfect paper that you could find.
Amazon doesn’t do this.
Create an experience.
Also create super fans. Word of mouth marketing is still the best form of marketing. We'll get into this in our next podcast.
Stone five: Know your enemy
In the words of Sun Tzu in Art of War: Know your enemy. Amazon gives you so much data that you can take advantage of and help your own eCommerce business grow.
In my upcoming course, I show you how I used this principle and how an idea i got from Amazon generated over $80,000 of sales on my own site. it was a product that I hadn’t come across before, but thanks to Amazon I discovered it and sold it! I wouldn't have known that product or gone to sell it if i hadn't known my enemy.
Amazon runs out of stock! They are big and don't always have the best stock management system. We sell the same product and people come to us when amazon runs out of stock. we offer a much more personable service and better rate and hopefully we'll have those customers coming back to us time and time again.
Final thought about knowing your enemy - maybe, just maybe, you could also sell on Amazon and take those customers. It's not something that will work for everyone but it is worth considering.
There you have it - my five stones that you can use as a Digital David.
Like David, you don't have to be afraid of your enemy. Rather, use what you have, run at them and chop off their proverbial head. You'll be surprised what you can do despite your size!
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