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Greatest eCommerce Competitive Risks to Small Businesses

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Running an eCommerce business is challenging. Many struggle with whether to have their own site or simply sell on Facebook, Amazon, eBay, Etsy or other platforms. While they may be your partners, they are also your strongest competitors.

Greatest eCommerce Competitive Risks to Small Businesses

Are you a brick and mortar business with no online store? You need one – yesterday! Each new study that comes out shows that ecommerce sales are growing. Even if your in-store sales are solid, why not capture a piece of the online market, too?

Don’t feel like reading? Check out the SlideShare or watch this video which covers the high points from this post:

Own Where You Sell

It is a huge risk to only sell on a platform you do not own or control.  Yes, you could spread that risk by selling on more than one of them, but you still don’t own or control where you are selling.

You never know when the rules may change such as eBay banning drop-shipping. That link says Amazon, but I know someone who was reselling from Wal-mart who is getting eBay warnings. Don’t wait until you lose your ability to sell with little notice.

So even if you choose to sell on one or more of these, I strongly recommend having your own store on a domain you own. You really must control and own your own domain. (Even if we do not really “own” them.)

Do not risk the customer base you build by selling only on someone else’s site. And get started growing your own customer base that you can upsell and remarket to regularly.

Choose the Best eCommerce Platform

It is never too late to start your own eCommerce store. Do it even if you already have an Amazon or eBay or other store somewhere. Cut out that middle man and get started increasing your average order size and repeat sales today.

Choosing the right ecommerce platform is extremely important. It must be fast, reliable and easy to use. The checkout process needs to be secure and have minimum steps –  ideally a 1-step checkout.

Make sure the search function works well even for multi-word searches. Navigation should make finding products simple. And your store must definitely be SEO-optimizable.

I personally know of a business whose traffic and sales doubled simply by switching ecommerce platforms. There is no one best for everyone. So do your research and choose wisely based on the number of products you wish to sell and upselling features you need.

You could start with the link above and the January 2019 industry research on the best ecommerce platform for small business: What 78 Industry Pros Think. When comparing prices, compare total price, as some charge for features separately and others as part of the base package.

Stick to the major companies. Don’t risk your business going with others as unreliable shopping carts are common and can cost you sales. That is especially important if you are spending money on advertising to drive traffic.

Most importantly, make sure your ecommerce site requires and enforces the use of strong passwords. The last thing you need is to lose money to fraud and hacked accounts.

Competing with Amazon Shipping

Do you know what the greatest risk to individual ecommerce stores is today? I believe it is the discounted shipping deal that Amazon has arranged with USPS, FedEx and UPS that no smaller ecommerce seller can match.

Some even claim that the USPS is subsidizing Amazon’s costs of shipping.

Amazon Prime customers can get their packages in 1-2 days for free. Amazon doesn’t have to pay a premium to get them there – they actually get a discount. And now they’ve even convinced the USPS to deliver on Sunday in some areas.

They are not even charging extra for Saturday and Sunday delivery. Can your business match that? Read on for what to do about it.

What small businesses including ecommerce sellers most need to happen is to better educate consumers. They need to understand how the power of their buying dollars affects their lives beyond obtaining products they need and want.

This has always been important, and today, small businesses need to proactively educate their buyers on the benefits of buying directly from small businesses – even though it takes a few days longer to receive their packages.

What can you share with customers?

  • Benefits of buying from small businesses.
  • Point out why they should not support bad corporate citizens.
  • Talk about the better pay and treatment small business employees receive.
  • Tell them how much you appreciate their business.
  • Share with them about your business, employees, and possibly family.

Many people are not aware of the importance of choosing where to spend their money. Some are because of what they’ve read on social media or in blogs or seen in videos on YouTube or Facebook.

Promote Small eCommerce Similar to Buy Local

The “Buy Local” campaigns are getting the word out well.  Various groups have produced infographics like the one below that provide visual proof of how where shoppers spend their money has a great impact on their local economies.

Why Buy Local

Where are the campaigns ensuring that people understand the importance of buying online from small businesses, too? I have not seen any similar type of information being spread online in any organized manner. We need some visuals like that for ecommerce.

On Twitter, small businesses are using hashtags and sharing photos and statistics to grow their share of the market:

  • #buylocal
  • #shoplocal
  • #eatlocal

Facebook has groups dedicated to specific locations, especially for local farmer’s markets. There are many large ecommerce groups on Facebook and LinkedIn where this can be suggested.

Use the ideas in this post to get discussions started on how to best encourage widespread support for buying directly from small businesses.

American Express sponsors an annual Small Business Saturday that occurs between Black Friday and Cyber Monday. Ecommerce businesses need to mount their own campaigns to increase awareness of the importance of supporting small business.

Spread Small Business and Customer Success Stories

Small businesses have an advantage: being small enough to care about individual customers. Learn to share your company’s and your customers’ success stories so that other potential buyers identify with them.

The #1 reason customers give for changing where they buy is that they didn’t think their current supplier cared. Make sure your customers know you care about them! See How to Make Customer Success the Heart of Your Small Business for ideas.

That can be as simple as a handwritten thank you note in every order. Or an inexpensive sample tucked in the box. Do not under-estimate the value of the little things that can set your small business apart.

Encourage shoppers to be patient enough to wait a couple extra days. What day they receive most products doesn’t matter much in the long run. Buying from individual small businesses can change the economy and environment for the better. And it is so easy to do.

You can do this collectively – through organizations – or individually using their sites, social media and email messaging. Just do it. Or someday, as in the days of buying with script and company stores, there may only be Amazon left.

Originally published 1/27/19. Updated and added video and SlideShare 4/12/19.

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Gail Gardner

Small Business Marketing Strategist at GrowMap
Gail Gardner is the founder of GrowMap.com. She is a Small Business Marketing Strategist who mentors small businesses, bloggers, and freelancers. After 23 years in the field with IBM and 5.5 years managing AdWords accounts, her focus shifted to small business marketing strategy. GrowMap.com is listed by Cision as a Top 100 Site for Marketers and has received three Small Business Influencer Awards from Small Business Trends. Named by D&B a Top 50 SMB Influencer on Twitter, you can follow Gail @GrowMap and on LinkedIn.
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Comments

  2. I’m planning to start a new online venture and this article helps me a lot to understand the initial risks associated with e-business. Thanks for sharing this informative piece of content.

    Reply

  12. I believe that if you start small and provide really unique customer service and personal touch, you can gain a share of the big market. Trying to compete with the big companies is not a good strategy, to begin with.

    Reply

    • Hello Ivaylo,

      Yes, even though small businesses cannot compete in some ways: often on shipping and sometimes on price due to not buying in volume, they CAN compete for customers in other ways.

      Actually interacting and caring about your customers goes a long way to encouraging loyalty. Small businesses that do not want to do that are at a disadvantage and have to compete on price alone.

      People have been heavily conditioned to care only about price. But more and more people care about much more than that. I used to pass several places I could have stopped on the way to the one whose owner or manager was friendlier and appreciated my business.
      Gail Gardner would love you to read ..Flipboard is the Future of Content Marketing and PR – AMA with Janette SpeyerMy Profile

      Reply

    • Hello,

      Yes, there is risk no matter what we do. Any site that ever links to any other site can be penalized by Google. Not having sufficient content on every product and category page on an ecommerce store can cause Google to take away your traffic.

      SEO is complicated. I would love totally ignore it, but unfortunately, it seems almost essential to have to learn it if you have a website. Even if you never build links, what other people beyond your control do can affect your site.
      Gail Gardner would love you to read ..How To Maximize Enterprise Business Shipping for Sustainable GrowthMy Profile

      Reply

  16. Due to modernization in the business world, E-commerce becomes the most important. This is helping businesses to access the global market easily. At the same time, competition among businesses will also increase. Thanks for sharing an article related to E-Commerce.

    Reply

    • Hi Babar,

      Not all businesses choose to sell globally because it is more complicated. Shipping internationally can be expensive. Knowing the laws of other countries is tricky. Europe, especially, has new laws related to selling to their citizens.

      For small, local businesses, having an online store helps them sell more to their local customers because they can look online and find out what you carry they haven’t noticed when inside your store.

      It also helps them expand their market within a particular region or their own country. Deciding to sell globally is another thing, and should be carefully thought out first.
      Gail Gardner would love you to read ..Why Improving Your Conversion Rate Optimization (CRO) is Not as Hard as You ThinkMy Profile

      Reply

  18. As someone that has been struggling with e-commerce for sometime now, I find this article very helpful. Thank you so much for posting it!

    Reply

  23. Assuredly interesting blog..!

    The best part of the blog is content.
    Content is really poignant and will lead readers to look more into it and along with the content, ideas you have contingent on is really mind-blowing.
    Even I came up with an idea of starting E-commerce business soon after reading your blog.
    Will be looking for more exorbitant forthcoming blogs.

    Keep going.

    Thumbs up for you.

    Reply

    • Hi Nick,

      Yes, I suspect most have no idea just how deep a discount they were given. I know someone who has been with the USPS for decades and when he told me I was shocked!

      Amazon is the Walmart of the internet! Yes, you can sell on their platform, but if you rely on it one day they can just take all your customers away in the blink of an eye.

      While it is easy to just build your business on the shifting sand of any platform, whether that is Amazon, eBay, Facebook or wherever, they can and do change the rules with no notice.

      Look at what happened to people who spent money to grow Facebook following – and now those followers never see what they share unless they pay to promote!

      And the eBay sellers who just found out eBay hates drop-shippers. They hated them, then they loved them, now they’re being tossed out.

      What we really need to do is get buyers to understand they control what happens with where they spend their money. They can reverse the damage done by Walmart and get small businesses flourishing both locally and online again.
      Gail Gardner would love you to read ..Facebook Live AMA: Zoho CEO Sridhar Vembu Live from Zoholics Thursday 4/11/19 10 ETMy Profile

      Reply

  26. Good post, as per my view the main struggle for small size business owner is maintaining stock, catalog designing, promotion

    Reply

    • Hi David,

      Local shops have to try harder to keep in touch with their customers and make sure they know they’re appreciated. Otherwise, they’ll use an app and simply buy wherever the price is lowest.

      But local shops don’t have to ship to their local buyers, so they have that advantage. Shipping can be expensive, especially on large, heavy or fragile items.

      As online sellers increasingly are adding sales tax now, they won’t have the benefit of buyers not seeing those costs when they make a purchase.
      Gail Gardner would love you to read ..Office Diplomacy: 7 Ways You Can Surprise Your Boss with an Unexpected GiftMy Profile

      Reply

  29. In my opinion the best option is start with a own store AND marketplace sales, is almost impossible sell without have credibility and good reviews, so is very important sell at marketplaces. In fact, you need to do it in way that promote your own store, where you will have better margins.

    Reply

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