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By: In: eCommerce SystemWarehouseOS On: May 04, 2018

Small eCommerce Companies: How You Can Compete with Amazon

It is widely known that Amazon continues to grow and appeal to younger customers. Starting with shipping speed, Amazon is the leading distribution company. The company owns more than 50 percent of the eCommerce space predominantly through their ability to make shipping faster and more cost-effective.

A Wall Street Journal article, “Amazon’s Free Shipping Pushes Small Retailers, Delivery Firms to Compete,” highlights several actions eCommerce retailers are taking to compete with Amazon. Strategically placed fulfillment operations help locate inventories closer to key markets. Working with best-practice tablet-based solutions, such as WarehouseOS, third party logistics providers (3PLs), or warehouse operators, competing eCommerce companies can generate an optimal combination of delivery carriers, balancing reliable service and costs. The gap between Amazon and smaller eCommerce retails can be narrowed quickly, especially in key markets.

Small eCommerce companies are wisely competing with Amazon by offering rapid, just as good delivery times. While chasing the ever-faster Amazon shipping times, smaller eCommerce companies must remain flexible and agile as customers require the time to close the gap between clicking the order button and the items arriving at their homes.

Some of this rapidity by Amazon is forcing the “small guys” to improve the online shopping experience. In the last three years, Amazon’s average ship time has been reduced by 1.5 days prompted by Amazon’s free 2-day shipping offer for Prime subscribers. This year, Amazon reached nearly 100 million Prime subscribers.

Small eCommerce companies can take a much smaller market share, at a higher profit, and compete directly with Amazon. Wisely curated eCommerce options from Birchbox to StichFix ensure that loyal customers create a subscription and pattern of regular purchasing.

Just like Amazon, small eCommerce companies must constantly debut new subscription services to create new recurring revenue streams. Amazon Prime now offers monthly on items like baby food and diapers at a steeply discounted rate and Kindle Unlimited is essentially Netflix for eBooks, allowing customers to read more than 2 million titles per month for a low monthly fee. Amazon’s clear focus on creating recurring income streams has helped propel their growth. However, this is not a value proposition that belongs only to Amazon.

Successful smaller eCommerce companies can take data from existing customers and ensure ease of ordering. Big or small, all online ordering must be made as simple as possible; from the ability to order with a single click or re-order previously purchased items.

Small single location warehouse eCommerce companies must quickly determine distribution needs by looking at the destination of customer shipments. This is a required insight for improving service and cost of fulfillment shipping.

eCommerce retailers are using new apps allowing them to drill down to data analysis AND to easily find more opportunity to provide better services at less cost. All companies can compete with Amazon. It starts with taking the best of Amazon; it ends with being better than Amazon in products, services, deliveries, and generating brand loyalty among customers.

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