uğur eskier
Author
Uğur Eskier

Amazon holds a significant place in the world's e-commerce and cross border e-commerce market. Amazon's revenue in all trading segments amounted for $ 232.89 billion in 2018. With this amount, it holds half of the online retail market, and 5% of the total US retail sales. Being a giant e-retailer that is now a global marketplace, it is not so easy to sell on Amazon! How to perform e-Commerce on Amazon? How to compete at Amazon? Here are the answers ...

What is Amazon?

Amazon is the world's largest online retailer. Along with being an online retailer, Amazon enables individuals or businesses to sell or display their products online. Being one of the most popular online markets used both by individuals and businesses, the platform serves in more than a dozen countries in different languages. The platform is able to ship to almost all the countries of the world. It also offers software and infrastructure solutions for businesses and individuals.

Founded by Jeff Bezos in Seattle Washington in 1994, Amazon was selling online books in the beginning. With this modest beginning, the platform transformed into an e-commerce retailer in the 2000s, and became one of the most powerful brands in the world. Not only did it expand its range of goods and services; the platform also joined in the video and cloud computing market. As its last move, Amazon also stepped in banking.

The company earned this success within only 25 years. Its growth was rapid during the last decade when e-commerce activities mainly increased. A certain portion this growth came organically; while another portion came up with the purchase of major online retailers like Zappos. It's not a fantasy to foresee this gigantic creature (!) would grow even larger.

Amazon's Market Ever Growing

The giant e-retailer still can not access the whole international markets; nevertheless, it holds 90% of the market. Amazon's unique position in retail market supports the growth of US' e-commerce as well.

According to internet retailers analyses results based on US Department of Commerce figures, an amount of US $ 513.68 billion was spent on US based e-commerce platforms in 2018. This rate increased by 14.2 % compared to the previous year. Amazon accounted for 5.2 % of US $ 3,632 trillion spent on retail products in the US last year, and 24.7 % of total retail sales growth.

The increase in the number of retailers or brands on the platform plays a major role in Amazon's growth. 58 % of the gross value of the goods purchased from Amazon was realized through the online marketplace in 2018. More than a third of the top 500 internet retailers, i.e. 176 of them, are now selling on Amazon. This figure was 104 in 2017, which means that the number of companies that started to sell in Amazon in 2018 increased by 69.2 %. These companies are spending ever more money on Amazon to promote their products and brands.

How to compete at Amazon?

Amazon is the top link in the chain in terms of the cross border e-commerce market. Over 44 % of all product searches start at Amazon's search bar. Moreover, Amazon holds almost half of online retail sales in the US.  “It's just the beginning”, according to CEO Jeff Bezos! Even the major retail giants in the world are struggling to compete against this giant creature of Amazon.

That said, how is it possible for other retailers to compete with Amazon; and do they really have a chance on Amazon? The answer to this question is pretty straightforward; there's no chance to compete at Amazon! Still, there's one key point: you don't have to compete at Amazon! It would suffice to solely learn how to survive on Amazon in the beginning. Which means that you have to have a goodknowledge of selling techniques at Amazon!

Don't Compete With Amazon!

No matter what, it is impossible to perform cross border e-commerce or e-commerce operations like Amazon does! Infrastructure, scales and pure sales numbers and many more… The platform has a huge physical footprint as well; however, physical stores (brick and mortar) can only grow through the products they offer the market.

Even if you can't compete with the scales, you can still offer competitive discounts or free shipping to your customers. It is possible to compete at Amazon by using different methods such as these. In terms of product pricing, however, it is almost impossible to offer potential customers a better price offer than they can find on Amazon.

You would need attractive offers to satisfy customers in order to sell at overseas marketplaces! "Free shipping" is a pretty attractive offer for customers! Amazon offers decent shipping opportunities. Fast shipping can make you outscore competitors. Otherwise you can't beat them! There is yet another field where you can sit at the same relative point as Amazon; which is the customer shopping experience.

Amazon faces most of the problems retailers experience with customers. They have to deal with various customer complaints. The customer shopping experience might have a significant role in customer retention and loyalty. Which means that even if you don't have the tools and objectives of major retailers on the Internet, you can still compete by offering something that customers desire.

Ways of Offering Customer Experience on Amazon

Sell in a niche: Just like you can't attract the large masses that Amazon sell, you also can't satisfy every need in every field! Therefore, consider the opportunities to fill the gaps. If you already have a good product and a buyer for that, start out with what you have. Review your current products and set yourself a path in a narrower arena. It would be wise to focus on products that meet customer demands rather than trying to be competetive at product pricing.

Research shows that following the customer experience, dissatisfaction with a product is the second reason for customers in not preferring a certain brand. Customers may abandon the brand as a result of poor customer service. Apart from marketing and promoting your products, you can eliminate a few problems by putting a little effort on customer support. Still, don't hesitate to look for other small product categories and niches that can serve your audience!

Collect customer data: Amazon collects data on each of its 300 million customers. Various data such as the browsing details, IP addresses, operating systems, search queries, wish lists, reviews, and previous order histories are valuable for Amazon. They perform this as a part of their marketing strategy and to determine how to best serve their customers in other ways.

Some of the customer data they use can be listed as;

  • Product recommendations based on previous searches, wish lists, and order history,
  • Kindle eBook recommendations based on Goodreads data,
  • One-click ordering according to user profile settings,
  • Estimated shipping date based on user profile settings,
  • Supply chain optimization according to customer locations,
  • Product pricing optimization based on search queries and competitors' data,
  • Cloud storage optimization based on user data.

All these data is a part of what makes Amazon superior against its competitors. You can use customer data that provides you competetive advantage for enhancing your sales on Amazon. To illustrate this notion: A retailer showed a growth number of 991% compared to the previous year, after it started utilizing customer data to build Facebook ads. Companies using customer data achieve 85% higher sales and experience 25% higher gross margin than the ones who ignore them.

Add subscription services: This is one of the things Amazon offers abundantly. Amazon has subscription services such as Subscribe and Save that allow customers automatically order certain products every month. Subscribe, and save your product selection! Amazon Prime membership offers certain benefits such as two-day free shipping, unlimited streaming, and use of Amazon's other services as well. Moreover, the company offers its customers "Amazon Payments" service as well, which provides an extra ease for them to purchase at other retailers by using an Amazon account.

Subscription services are not just for the convenience of the customers but for raising the revenue numbers of vendors as well. Research shows that the organizations providing subscription services are twice as fast as their competitors in raising revenue and experience twice the total growth compared to those. So, make a plan to offer renewable subscriptions for certain products!

Improve your shipping system: You can't compete directly with Amazon when it comes to shipping! The aim is not to compete anyway; it is "Staying in the Game"! There are many ways to improve the shipping system, and to provide additional convenience to customers. First, try to offer a minimum basket value or a free/discounted shipping service for specific products.

Research shows that on an average 48 % of customers add products to their baskets for free shipping. This may incur some costs for companies; however, you might also generate additional income. If you have certain lightweight products, you can offer free shipping for land delivery. Most carriers offer low-cost shipping options.

Pay attention to customer service: Finally, and perhaps most importantly, the best way to stay at the same level in Amazon is to provide superior customer service and satisfaction. Amazon actually is pretty successful in this regard. 67 % of respondents to Amazon's customer service survey last year declared being "highly satisfied".

But what makes customer service satisfactory for the majority of consumers? Consumers value customer satisfaction and services. It doesn't matter if customer service is available via email, phone or chat! Customers are satisfied with the results when they are convinced that the customer representative is a human.

You can add automation to reduce response times, if you have a team that handles customer complaints. If you lack a comprehensive team to meet customer service demands, you can make use of a customer service software or applications like LiveChat, Desk.com, or Help Scout. This would cause you an extra cost, but it's worth it for the customer loyalty!

Conclusions

Though it would sound nice to say any store could compete with Amazon, the reality is not so. Even the greatest brands don't have a proper plan to take over Jeff Bezos and the e-commerce world. Still, there are heaps of things e-commerce stores can do to make their customers as happy as Amazon's.

First of all, focus on a great product offering that targets your niche! Or think of new niches to attract the customers that are not on Amazon. Then, use customer data to your advantage. Provide subscription services for reselling products. Provide free shipping as applicable as possible. Even if there's nothing you can do, you still can offer things important for your customers and get a satisfaction rate like Amazon's!

You can also consider online Amazon training options, such as a sales techniques training camp in Amazon America.