11 Ways Your Online Store Can Compete with Mega-Retailers (And Win)

by Jason Cosper
11 Ways Your Online Store Can Compete with Mega-Retailers (And Win) thumbnail

It’s hard to grasp the sheer scale of mega-retailers such as Amazon. In 2020, Amazon alone took in almost 38% of US online sales (the next closest competitors were Walmart with 5.8% and Ebay with 4.5%). Even more staggering? Amazon’s net sales totaled $96.15 billion in Q3 2020. It’s safe to say that Amazon’s success is unparalleled.

Launching an e-commerce store that can compete with those numbers is, erm, difficult.

Fortunately, your online store doesn’t have to beat the likes of Amazon or eBay to be successful. What it needs to do is find a share of the market for itself and learn how to thrive within that retail niche. That way, you’ll be able to scale your store and increase its earnings organically over time.

In this article, we’re going to talk about 11 strategies you can implement to compete with e-commerce giants such as Amazon. We’re not saying you’ll end up making more money than Jeff Bezos, but every extra dollar helps, so let’s get to it!

1. Focus on Niche Products and Services

Wherever it is that you live, chances are there are a handful of online megastores where you can buy almost anything you want. Those types of stores excel at casting a wide net to catch as many buyers as possible. The problem is that they often can’t compete with specialized sites when it comes to offering more niche items.

For example, while a big box store might have hundreds of generic mugs for sale, you could offer to create custom designs, thereby filling a more specific niche.

Personalization options are a way to differentiate products.  

The main takeaway here is that if you’re starting out, the smart move is not to try and compete at every level. What you need to do is have a specific buyer persona in mind and focus on those buyers, offering the products and services they want. In many cases, filling a particular retail niche may even enable you to command higher prices, so it’s a win-win scenario.

2. Offer Subscription-Based Services

Offering subscriptions is an excellent strategy because it allows you to create consistent, recurring income. Plenty of big-box stores offer subscriptions. Amazon, for example, offers the incredibly popular Prime service.

Amazon Prime is the world’s most famous subscription service.

Even more niche stores, such as Humble Bundle, understand the power of subscriptions. On top of offering cheap video games, this store enables users to pay a set price each month for more stuff.

Humble Bundle offers a set price for access to hundreds of games.

Just because you run an online store doesn’t mean that all your income has to come from product sales. You can also offer subscriptions for monthly freebies, discounts in your store, access to exclusive deals, and more. Keep in mind, though — whatever angle you decide to take with subscriptions, it should synergize with your store’s products.

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3. Provide Better and/or Cheaper Shipping Options

Competing with massive online stores when it comes to shipping can be difficult. They move such large volumes of products that they can get access to discounts and perks that small online stores can’t hope to match.

What you can do to compete is offer better-quality shipping options for your particular region. In most cases, smaller stores will focus on specific cities or just one country. That means you have the edge over more global stores, since you may be able to offer faster shipping times and a more personalized experience throughout the process.

In some cases, you might even have access to cheap shipping options you haven’t considered. For example, there are a lot of local startups focused around product deliveries. Partnering with them may enable you to offer ultra-fast low-cost shipping, depending on where your customers are located.

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4. Excel When It Comes to Customer Service

The level of customer service you offer can make or break your store. People might be willing to take a chance and buy from a retailer they don’t know, but if you treat them poorly, you can be sure they won’t come back.

Some of the most common service-related mistakes small retailers make include:

  • Taking too long to answer customer questions
  • Offering cookie-cutter answers to customers
  • Giving inaccurate shipping estimates or sending packages late

Just to drive home how vital the customer experience is, keep in mind that happy clients are more likely to send new business your way. Likewise, retaining customers is much cheaper than collecting new leads.

In other words, a little more time spent on ensuring better service can pay off for years to come.

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5. Optimize Your Online Store in Every Way You Can

The difference between one and three seconds may seem insignificant, but it’s not — particularly if you run an online retail store. Studies show that if your website takes more than a few seconds to load, people start getting impatient. Amazon alone estimates that a one-second delay in its loading times could cost up to $1.6 billion in lost sales over the course of a year.

In other words, your website needs to be fast. There are a lot of factors that can hurt its performance, such as:

  1. Using a hosting plan that doesn’t offer enough resources.
  2. Failing to optimize your images.
  3. Adding too many scripts to your pages.
  4. Not using browser caching.

Reasons two through four fall under the category of poor website optimization.

But it doesn’t matter how much effort you sink into optimization if your web host isn’t up to par. What we recommend is that you measure your site’s loading times, try to optimize them, and consider moving to a new host if you’re still not seeing the results you want.

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6. Use Social Media to Promote Your Store and Its Products

The largest online retailers can spend millions on advertising each day. At the same time, so many people are familiar with them that word of mouth alone is often enough to get them plenty of sales.

“Mom-and-pop” online stores, on the other hand, need to be much savvier when it comes to marketing. Since you can’t compete in terms of budget, the easiest way to get attention to your store is via social media. This involves:

  1. Being active on several social media platforms.
  2. Knowing how to engage with your audience and reach new users.
  3. Connecting with influencers who can promote your products.
  4. Using non-traditional forms of content, such as infographics, for higher engagement.

The main takeaway is that small businesses need to make more of an effort to get online conversions. However, if you know which platforms to focus on and you have a good grasp of social media, these approaches should yield excellent results. Also, keep in mind that it might be worthwhile to hire a social media professional if you’re not as savvy in this area, as it’s essential to your store’s success.

7. Work on Your Email Marketing Strategy

There’s a reason almost every single website and online store wants your email address. They understand that it’s a powerful tool to drive sales and increase engagement. The average person checks their email 15 times a day, and nearly 60% of users say that the messages they get influence their purchases.

More importantly, email marketing is incredibly scalable, even for a small store. The more addresses you collect, the more sales you can drive via campaigns. What’s more, most email marketing platforms enable you to send an almost unlimited number of messages for a low price.

That’s not to say that you should spam your subscribers, however. In fact, you should only contact them when you have something of value to offer, such as product discounts, important news, and so on.

Amazon sends targeted email deals.

If you’re already using email marketing but you want to get more out of it, then it may be time to review your strategy.

8. Consider Streamlining Your Product Catalog

It stands to reason that the more products you offer, the more sales you’re likely to get. The problem is that managing a huge catalog of items can be much more complicated than you’d imagine. For each product, you have to consider sourcing, storage, shipping costs, marketing materials, and more.

For massive online stores, that isn’t a problem. They’re all about volume, and they can throw all the resources they want at the above tasks. However, the more strapped you are for money and personnel, the more that overextension can hurt you.

Fortunately, it’s entirely possible to run a successful online store that offers a limited catalog of products. SlimFold, for example, built an entire e-commerce experience around a handful of unique wallets.

Alt text: SlimFold has a streamlined product offering.

Offering a limited catalog ties in perfectly with targeting a specific niche of users. As long as you know there’s demand for the products and services you offer, you can limit them to give a feeling of exclusivity and test higher price points.

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9. Offer Multiple Payment Options

When it comes to online purchases, most people rely on credit cards. However, there are a lot of payment processors you can use, including PayPal, Stripe, Amazon Pay, and many others.

You’ve probably noticed that a lot of the major online retailers offer several payment options during their checkout processes. This enables the shopper to pick whichever choice they feel most comfortable with, so the store doesn’t lose out on any potential purchases.

Large retailers offer many payment options.

For smaller online stores, dealing with a lot of payment gateways can be a hassle. It means that your earnings will come in via multiple channels, you’ll have to set up accounts for each one, and you’ll need to make sure you’re in compliance with various policies.

However, despite those downsides, offering multiple payment options is still the way to go for most online stores. At the very least, you should enable users to pay via PayPal and the most popular credit cards — just to cover your bases.

10. Study the Competition Within Your Niche

So far, we’ve focused mostly on how to compete with a big box retailer. However, it’s crucial that you don’t lose track of other smaller stores within your niche since they’re also competitors.

Studying your direct competitors so you can provide a better experience than they do is incredibly important. After all, smaller retailers can be much easier to overtake than e-commerce giants. You can compete with these competitors in a number of ways, such as:

These are similar to some of the tactics we’ve discussed so far. Only this time, you’re competing against another David instead of Goliath.

11. Offer Only the Best-Quality Products

Since you can’t generally compete with mega-retailers in terms of inventory, pricing, or shipment, you need to focus on quality. We’ve already talked about providing top-notch customer service, but making sure the products you offer are as good as they seem is also essential.

These days, online megastores such as Amazon are getting overrun with cheap product knockoffs. That’s causing a real headache for the consumer, who doesn’t understand why they’re getting low-quality items from a retailer they know and trust.

This opens up the opportunity for smaller online stores to attract those customers. In many cases, people who want high-quality items will turn to more specialized online stores. If you can guarantee that your products are the real deal, and you offer a solid return policy, this can be one of your best ways to get more sales.

Slay the Retail Giant

When it comes to an e-commerce business, you need to be realistic about your expectations. Competing with mega-retailers when it comes to inventory or pricing is just about impossible. However, there are plenty of small business owners who thrive, despite all the competition they face.

The key is to understand that although you can’t compete in some categories, there are plenty of areas where smaller companies can get a real edge. For example, smaller operations can provide much more personalized customer service or focus on product quality in a way that a big online retailer can’t.

Jason is DreamHost’s WordPress Product Advocate, based out of Bakersfield, CA. He is currently working on making our DreamPress product even better. In his free time, he likes to curl up on the couch and watch scary movies with his wife Sarah and three very small dogs. Follow him on Twitter.