Practical Ecommerce

Independent retailers, repeat buyers, and Amazon

It is getting harder to gain and keep customers. Traditionally, independent retailers have earned their business by providing a better service or product to consumers — a unique selling point that wins repeat customers.

The lifeblood of retailing

It cannot be overemphasized: Repeat customers are the lifeblood of any retailer. It costs a lot of time and money to obtain customers. Marketing, such as search engine optimization, is not cheap, and new visitors do not usually convert into customers.

Repeat customers, however, have come back to your site on their own accord and are much more likely to spend money.

Many retailers offer loyalty schemes to encourage customers to return and spend more. These tend to work with large brands, but are less likely to work with smaller independents. The situation is made even worse when you take into account the third-party selling channels, such as eBay, Etsy, and Amazon. Many successful retailers now sell only on those sites.

Whilst third-party sites bring in much needed revenue, they are poor building repeat customers. The vast majority of buyers from these sites think of themselves as customers of the sites. So they return to Amazon, Ebay, or Etsy and not your site.

One way of countering this is by heavily branding your packaging, invoices, and all communication you send to the customer. Amazon is excellent at this, too, as every box that leaves its warehouse has Amazon’s name on it. Thus merchants using Fulfillment by Amazon have little chance at establishing a brand. But if you try to emphasize your own branding, take care to not to break any self-promotion rules of the third-party marketplace.

Retaining customers

To gain repeat customers to your own site, you must establish three things in my experience. First, customers need to remember your company when they consider purchasing something that you sell. Second, they need to have a reason to use your company rather than a competitor. Third, it must be easy for them to find you.

Branding helps customers remember your company. If you have an original, memorable brand that is closely related to your products, you are on the right track. Do not try to steal or mimic someone else’s brand, even though is difficult to find catchy words and phrases that have not been used.

As to why customers should purchase from your company, it is challenging to compete on Amazon with anything other than price, and with the result that margins are trimmed so much there is little or no room for further discounts for repeat customers. Increasingly, the largest proportion of income made on a sale goes in commission to the marketplace.

‘Shop independent’ campaign

If you can encourage the customer to leave the marketplace and come direct to your site, then you can share some or all of the savings with that shopper. This is the long game. Currently customers do not realize how much money these third parties take. If more independents collaborated and started educating consumers, then perhaps more of them would look outside of these marketplaces.

It would be nice if a “shop independent” campaign could be developed that educated people to the idea that local businesses pay local taxes and help support local activities. And, for the Internet, local is not just your town or city. It is also your state and, indeed, your country.

In the long term, we have to change the online shopping behaviors of most consumers. We need to educate them to understand that, whilst Amazon is a good way to initially find an item, it will be better to go elsewhere for repeat purchases. If we fail to do this, eventually online retailing will consist of only marketplace giants, like Amazon.

In short, independent ecommerce sites need to promote the advantages shopping outside of the Amazon bubble.

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