3 Big Reasons You Shouldn't Be Scared of Amazon
Imagine a monster movie where the monster in question is played by Amazon.com, the e-commerce giant, and the everyday folks tasked with taking it down are played by small businesses all over the country.
Here’s the twist: Instead of defeating the monster, both sides find an equilibrium, where the monster continues to loom over everyday life but the small businesses are able to go about their business — and not just survive, but thrive.
It might not be the most interesting movie, but that’s the plot of how things are playing out in real life, right now.
It sounds unlikely, but there are actually plenty of reasons for business owners to be optimistic about their future in retail. Amazon may have advantages like scale and deep pockets, but there are three main reasons why small businesses shouldn’t be afraid of Amazon.
Amazon Can’t Beat Your Customer Experience
That is, Amazon can’t beat your customer experience if you let it. This is different, though related, to customer service. Plenty of people appreciate Amazon’s customer service, which helps facilitate returns and deals with complaints ably. Your business needs to create, quite literally, an experience that can’t be matched by a massive online retailer.
Take advantage of a number of free or cheap online tools to create a brand voice and tone that helps you stand out, even if your business is online-only. For example, create an email newsletter to keep local customers aware of what’s in stock and what’s coming next. Post on Instagram or Facebook about upcoming events, or give behind-the-scenes looks at what you’re working on.
From hosting community events to providing a personal touch with every sale, small businesses can become something Amazon simply never could be: a local, cultural touchstone that engenders feelings of loyalty. Right now, Amazon customers are loyal to the prices, and that’s about it. You can do better.
Amazon Can’t Be as Flexible as You
As a company of Titanic proportions, Amazon barrels straight ahead and needs quite a bit of time to turn the ship.
Smaller businesses, on the other hand, can make spur-of-the-moment decisions that can help them capitalize on emerging trends and last-minute windfalls.
If you want to get out and engage with your community more, set up a pop-up shop or sign up for a local festival, and with the help of a mobile point-of-sale (POS) system, bring your store to new locations and in front of new faces in the blink of an eye.
If you want to start carrying new lines of inventory, all you need to do is update your POS system and start selling.
If you want to start selling your inventory in a different channel — even if that channel is Amazon Marketplace! — all you have to do is sign up and go.
Important decisions at big companies are the subject of many meetings and clearing many benchmarks. You don’t have to worry about that. As a result, you can capitalize on opportunities that simply aren’t available to bigger firms.
Amazon Isn’t Building a Sustainable Model — Like You Should Be
One of the great open secrets about Amazon’s success is that it’s predicated on the fact that the company isn’t all that profitable. Its enormous scale and financial backing is allowing it to crush competition in its field, but it’s not exactly massively profitable. Eventually, Amazon will have to start delivering profits, and some of the things people love about the company — namely, it’s absurdly low prices on a lot of stuff — will change.
Amazon is currently posting records profits, but part of that is due to a recent massive corporate tax break granted by the Trump administration. The retail side of Amazon’s business runs "about breakeven." That’s pretty modest for a company of Amazon’s size.
As a small business owner, you likely don’t have the luxury of relying on massive tax breaks or investments in other areas like selling advertising or server space.
That’s a good thing. This challenge encourages business to create sustainable business models, using tools that cut costs and increase efficiencies.
You shouldn’t be scared of Amazon. You should be inspired to invest in inventory management software (which a surprising number of small businesses fail to do) and use third parties to offer same-day delivery to nearby customers.
This way, when Amazon does jack up prices or otherwise change its model, and customers go looking for businesses that can compete on price, you’ll not only have a sustainable model in place, but the customer experience and flexibility to go with it.
Amazon isn’t an existential threat to companies that aren’t competing with it directly. It’s a challenge to be surmounted … and you should be up to the task.
Jay Egger is a digital marketing specialist for Fit Small Business, a digital small business education publication. He has experience in public relations, SEO, journalism, social media management and video production.
Related story: Why Merchandisers Must Do More With Less in 2018