Although the e-commerce landscape is maturing in many ways it is still a bit like the Wild West. Every day you must patrol your territory with a wary eye on competitors ready to undercut your prices or introduce similar products into the marketplace. Of course, your first reaction may be to respond in kind by further lowering your prices to get the edge of your competition, but price reduction is not always the best solution. In fact, there are many ways not just to sustain your business, but actually expand your enterprise, without ever having to institute a price drop. It all boils down to identifying your ideal customer and creating a strategy that appeals to their specific wants and needs. While it may sound counterintuitive, by narrowing your focus, you can actually expand your reach.
It’s obvious that the old adage of “if you can’t beat ’em, join ’em” applies to e-commerce and the behemoth that is the Amazon marketplace. The truth is, you cannot compete with Amazon, which will always offer better prices, free and fast shipping, and other benefits. You can coexist by having a tighter niche and selling to a specific customer subset primed for the product or service you are delivering. By serving a particular audience, you can focus on what they really want and actually create a better customer experience.
Find Your Niche
If you don’t know where to begin, there’s no need to reinvent the wheel. Start with Amazon’s onsite directory. There you will find thousands of niche ideas as you click from the main directory to individual items. You will also see how Amazon groups and labels items, and how they connect those products to additional purchases (the “customers who viewed this product also bought” feature, for example). Doing this will give you an eye-in-the-sky view of what customers who buy your product are buying, and that can help you narrow down the type of customer that best fits your product. If you have your own customer data, you should mine that information as well. Creating customer profiles will allow you to fine-tune your marketing and improve your customer acquisition and retention.
Use Marketing to Make Your Offerings More Interesting
Of course, once you have an ideal niche customer in mind, you must reach them, and that means fine-tuning your marketing efforts. Your website should be fast, simple to use, and designed to engage your customers and prospects. Targeted email campaigns and loyalty programs will help hook potential customers and lead them through the pipeline from initial interest to final purchase. Don’t forget about the content! Make sure your website has fantastic visuals (hire a professional to take photos whenever possible) and include detailed descriptions with keywords that address the benefits and features of your product. Consider creating instructional videos or testimonials from a previous customer. Finally, blogs and newsletters can help with your website’s SEO, which will expand your reach online and help you connect with even more prospects.
Your Prices Should Never Be The Lowest
The bottom line is that as you face big competitors like Amazon, you should never resort to price wars to compete. Instead, it would help if you focused on selling high-quality products with a high margin. The truth is, there will always be someone who can offer a lower price. Still, if you provide added value in terms of customer service and a superior product, you can win over companies offering a bargain-basement experience. Don’t forget that when you drop prices in response to a competitor’s price drop, you are both just racing to the bottom in terms of revenue. Instead, maintain a reasonable price and invest in customer acquisition. In the long run, better marketing will drive customers to your product, build brand loyalty, and build value perception so that your products will be seen as “worth the cost.”
A cloud accounting firm with experienced bookkeepers that understands e-commerce can help you sort out which products perform better than others so you can make decisions that will grow your business, so you don’t have to compete on price.
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November 28, 2023
