In 2017 nearly 50 percent of all U.S. ecommerce sales went through Amazon. In the run-up to Thanksgiving, the rate was even higher. It is thus difficult to ignore Amazon if you want to succeed in selling online.
But that is not to say that you have to follow other Amazon sellers and chase the price to the bottom. Instead, look carefully at the behavior of your target customers and determine how best to profit from them.
For my own consumer behavior (and all those I talk to), I tend to first search on Google to see what is available. Then I read product reviews. Amazon is the largest resource for reviews, typically. Those reviews are also the most honest as Amazon does not filter out negative ones.
Once I have selected the item I want, I find the best place to buy it. If all else is similar, I choose Amazon. Not only because of the price but also because I know I will receive good customer service and the assurance of a refund if things go wrong.
It is difficult to break this buying routine. But there are at least three hooks to lure shoppers away from Amazon, in my experience.
Offer similar products
Recently I was looking for a supply of fresh coffee beans. In following the above process, I found that the reviews on Amazon for a particular item were nearly all good, but they were all in one or two week periods, followed by six-month gaps. Investigating further, I found that the independent coffee supplier had two nearly identical offerings.
One, on the supplier’s site, was cheaper than on Amazon. The supplier would roast the beans on order and ship within a couple of days.
The other offer, on Amazon, was for the identical beans. But they were already roasted and in stock. This was a clever way of getting around Amazon’s distaste for undercutting its price. It also took advantage of the Amazon review resource. I wanted to buy the product because it was well reviewed. The offering on the independent site was better (fresher) and cheaper. I purchased from the independent site, which benefited as it did not have to pay the Amazon commission.
Moreover, Amazon served as an effective advertising platform for the coffee bean supplier. Amazon directed a lot of customers to the supplier’s website, for free. All it cost the supplier was to switch prices and pay the Amazon commission for two weeks every six months.
The other instances when I do not buy on Amazon occur when alternative sites offer a unique service or product. This is typically for personalized products, a bespoke product build with options, or an installation service. Amazon is very good at volume shipping — taking an item off a shelf, boxing it, and shipping it. The emphasis is price and speed.
But if merchants can deliver an extra service or feature, then Amazon cannot copy you. Just find the products and identify additional options or services that make it difficult to match on Amazon.
Amazon sellers that delay shipping run the risk of being penalized and even suspended. However, delaying shipping to add value is something to sell to consumers. In the end, it is consumers who matter. Retailers who are slaves to Amazon sometimes forget this.
The Profitable Seller: Mastering Amazon FBA in 2023
A final alternative to selling on Amazon is to think local. Neither Amazon nor large international retailers have local market knowledge. If you can tailor your offering locally, you are unbeatable in your area. This could include fast home delivery, or local pickup, or local viewing, or anything else you could think of that matters to your local shoppers. Never underestimate the power of dealing with your neighbors.
Merchants cannot ignore Amazon. But it is often inflexible due to its size and way of doing business. If you can find something to sell that takes advantage of this inflexibility, you can succeed.