Amazon Competitors – How To Beat Amazon And Diversify Sales

If you want to succeed in ecommerce, competing with Amazon is an inevitable reality. Here’s how you can leverage Amazon competitors to create a successful and diversified ecommerce business.

Over the years, Amazon has dominated the market and is one of the biggest brands worldwide in terms of revenue and reach. In 2019, the leading e-retailer earned $280.5 billion in net sales.

And in 2020, they are projected to earn well over $343 billion!

Amazon Projected Revenue

But how does Amazon fare in just the ecommerce market?

In 2019, Amazon hit an impressive 49% market share of US ecommerce sales, making up 5% of all retail sales in the entire country.

What’s more, Amazon’s market share beat the top three Amazon competitors combined, with eBay at just 6.6%, Apple at 3.9%, and Walmart at 3.7%.

Amazon provides a wide range of services from online retail to subscriptions. But that hasn’t stopped competitors like eBay, Netflix, and millions of online stores from achieving financial success.

Whether you own a small or big ecommerce business, it’s possible to compete with Amazon, attract your own customers, and succeed in sales.

But how do you go up against a global ecommerce giant? And more specifically, how can you drive customers to your website despite Amazon being the top-of-mind ecommerce platform?

I’ll be going over Amazon’s top competitors and sharing actionable tips you can apply to build a successful and diversified ecommerce business.

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Amazon Competitors - How To Beat Amazon And Diversify Your Sales

Why Bother Competing With Amazon?

Competing With Amazon

The first question I’m often asked is why bother competing with Amazon at all? If Amazon owns over 50% of overall ecommerce sales, why not just focus on selling on Amazon?

Why not just join the winning platform and go all in?

First off, Amazon is easily the most cut throat platform to sell on and it’s filled with dirty sellers just waiting to sabotage you.

  • Unscrupulous sellers will copy your products and your images.
  • Evil sellers will hijack your listings with inferior goods.
  • Underhanded sellers will orchestrate a string of negative reviews to bring down your listings.
  • Ruthless competitors will buy up all of your inventory and return it

What’s worse is that Amazon doesn’t really care and they can ban your entire business for factors beyond your control.

Amazon calls all of the shots and they can change the rules at any time.

For example, during the Coronavirus scare, they prevented sellers from shipping nonessential goods to their warehouse.

And this one policy change was enough to destroy many ecommerce businesses overnight.

Amazon Essential Items Policy

Not only that, but Amazon was recently caught by the Wall Street Journal for leveraging 3rd party seller data to launch competing products.

Amazon Competition

Bottom line, if you rely on Amazon for a significant portion of your sales, your business will eventually deteriorate. It’s just a matter of time.

If you want to learn more about evil Amazon seller tactics, then read my post on the Dangers Of Selling On Amazon

Amazon’s Top Ecommerce Competitors

Amazon is the current leader in the ecommerce space. And thanks to Coronavirus, their revenues are expected to grow even faster than previously projected.

Ecommerce Market Share

For the first time ever in 2020, online shopping overtook retail sales. And because of Covid-19, ecommerce as a percentage of retail sales is now projected to be 18-20%!

Let’s take a look at Amazon’s biggest competitors in the ecommerce space.

Amazon Competitor #1: Niche Online Stores

Shopify

Approximately 24 million stores sell online. But there is only one Amazon.

Amazon may be an ecommerce giant, but it still has to go up against millions of competitors.

Fully hosted shopping cart platforms like Big Commerce and Shopify have made it easier than ever to launch your own ecommerce store.

In fact, you can literally launch a fully featured online store in a single day without any technical knowledge whatsoever!

Recently, Shopify released a brand new mobile app called “Shop” that I believe will become Amazon’s main competitor in the years to come.

Basically, Shop is a consumer shopping app that allows shoppers to browse a feed of recommended products and make purchases with a one-click checkout process.

Sound familiar?

Shopify is basically making an Amazon clone composed of ecommerce stores on their platform.

Because Shopify also owns a product fulfillment network, they can in theory offer the same “Amazon Prime-like” shopping experience for everyone.

But the main difference is that the Shop App will provide a distinctive brand shopping experience instead of Amazon’s vanilla listings that all look the same.

Furthermore, Google has also joined the fray by announcing a free tier for their Google Shopping network.

The ecommerce industry is estimated to earn $6.54 trillion worldwide by 2022, leaving much room for online stores to get a slice of the cake.

Amazon Competitor #2: Walmart

Walmart Logo

Right now, Walmart is significantly larger than Amazon in terms of overall sales. In 2019, Walmart generated $514 billion in revenue which is over 2X what Amazon achieved.

Walmart’s strength lies within their network of thousands of physical store locations all over the world. For the past several years, Walmart has been ramping up their online sales and growing at over 40% year over year.

They also have a strong international presence that rivals Amazon and are rapidly growing their fulfillment services to create a viable Amazon alternative.

If you are looking for another online marketplace to diversify away from Amazon, Walmart should be your second or third choice after your own ecommerce store.

Amazon Competitor #3: Ebay

what is ebay

In terms of ecommerce sales, Amazon is significantly larger than Ebay.

In 2019, Amazon’s annual revenue was $280 billion whereas Ebay only made $10.8 billion. Meanwhile, Amazon has about 310 million customers whereas Ebay only has 167 million.

But even though Ebay is a much smaller marketplace than Amazon, you can still make significant sales by selling on their platform.

The main advantage of selling on Ebay is that you can more effectively brand your products. Ebay offers more opportunities to design a branded storefront and create unique product listings to make you stand out among the crowd.

In addition, whereas Amazon hides almost all customer information from you, Ebay is much less stringent about your communications with your customers.

As a result, it is easier to obtain real email addresses and contact info.

Finally, you can practically sell whatever you want on Ebay including used items. If your goal is to get rid of used or surplus products, then Ebay is your platform.

It is also much easier to get started selling on Ebay. You don’t need UPC codes or any real infrastructure to sell on the platform. It’s quick and easy.

For a more detailed analysis, read my post on Selling On Amazon Vs Ebay

Amazon Competitor #4: Rakuten

Rakuten

Rakuten is a Japanese ecommerce company that is rapidly growing its presence worldwide.

In 2019, Rakuten generated over 12 billion dollars in ecommerce sales and controls a significant share of the global ecommerce market.

Similar to Amazon, Rakuten charges $39/month to sell on their marketplace and takes between 8-15% of your revenue as a commission.

If you are looking to expand beyond Amazon, Ebay and Walmart, then give Rakuten a shot.

Amazon Competitor #5: Niche Marketplaces

Etsy

In addition to Walmart, Ebay and Rakuten, there are several other niche marketplaces you can use to market your products depending on what you sell.

For example, NewEgg is the global leader in selling electronics products like laptops, computers, TVs, smartphones and cameras with over 2 billion in revenue in 2019.

If you sell an electronics product, then you should definitely look at NewEgg.

Wayfair is a leader in selling home goods online and generated $9.1 billion in net revenue in 2019. If you sell household products, then you should consider listing your products there.

Houzz is another marketplace offering home goods as well.

Etsy focuses on handmade items and craft supplies and earned $818.79 million in 2019.

If you primarily sell handmade or craft supplies, then you should look towards listing your items on Etsy.

While the Etsy marketplace isn’t huge, the customers that you do obtain will be far more loyal and conducive to repeat purchases.

In addition to the global marketplaces listed above, you can usually find hundreds of smaller niche marketplaces in your country to sell your products online.

How To Compete With Amazon

amazon

Now that you know it’s possible to compete with Amazon and build a successful ecommerce business, the next step is to understand how to do it.

The tips below have worked for countless online businesses, and it can guide you as you build your own store. Keep reading to find out how to survive and thrive in the world of ecommerce.

Build Customer Loyalty

Retaining your existing customers is just as important as acquiring new customers when growing your business.

After all, it’s easier to convince someone to keep buying your products if they recognize and trust your brand.

Based on experience, our repeat customers generate over 36% of our revenues every year. In addition, our best customers usually purchase more than 2X our typical AOV.

BBL Repeat Customers

A customer loyalty program is a great way to get repeat sales. When you incentivize purchases with rewards and discounts, your customers are going to keep coming back.

The numbers say it all: 77% of consumers are more likely to stay with brands that have loyalty programs. Moreover, customers are willing to spend 37% more with a brand if they are a loyalty program member.

Unfortunately, only a few small ecommerce stores offer loyalty programs since they’re usually expensive to implement.

But the good news is there are simple and inexpensive alternatives.

For example, I used ManyChat and Facebook Messenger Chatbots to implement a customer loyalty program. The upfront work can be tedious, but it is worth it.

Build your customers’ trust with excellent customer service and high-quality products, and they’ll keep coming back.

Also read: How To Increase Your Repeat Purchase Rate

Narrow Your Niche And Dominate

Narrow Your Niche

Amazon sells everything. On one hand, this is the tech company’s strength. Customers know they can find almost anything on their marketplace.

On the other hand, this limits Amazon’s capacity to be an expert in every niche. Amazon simply can’t compete with small online stores that specialize in a particular industry.

Moreover, Amazon is too big to offer personalized customer service.

This is where your e-commerce business comes in.

Identify your niche and dominate it with killer customer service and content marketing.

By narrowing our niche to linens for special occasions, we’ve managed to deliver great quality products and personalization services to our customers.

You can’t beat Amazon at everything, but you can beat them at one thing.

Boost Your Website SEO

Technical SEO

Take a look at these numbers for perspective: 49% of U.S. shoppers first go to Amazon when buying new products. 36% go straight to a search engine. And just 15% go directly to brands.

Amazon may be the first destination for many consumers, but search engines generate large traffic as well.

And as an online seller, you should be exerting serious effort to rank on Google’s top search results (aka boost your website SEO). This is your opportunity to drive traffic to your website and potential sales.

The following are two actionable ways to boost your website SEO:

  • Keyword Optimization – To rank in search engines, choose the right keywords for your products. Long Tail Pro is a useful tool that lets you find out which keywords people use to find your type of product.

    Once you’ve identified your keywords, place them in title tags and meta descriptions of relevant pages in your website

  • Publish Quality Content – Google will always prioritize quality over quantity. In fact, after doing a website audit on MyWifeQuitHerJob.com and removing a third of my content, my Google search traffic went up by over 40%! The takeaway: focus on providing the best content on your website.

Some ways you can improve your website SEO include:

  • Eliminating poor quality content
  • Removing low-performing posts in terms of traffic or backlinks
  • Fixing technical SEO issues
  • Improving the remaining content

In my website audit checklist, you’ll find templates and tools that can help you boost SEO.

Moreover, useful SEO tools like Ahrefs and Google Analytics can give you valuable insight into your website, as well as your competitors, so you can grow your search traffic and beat your competition.

Grow Your Email List

Email Provider

Despite the growth of new communication channels like chat apps and mobile messengers, you can expect email to stay relevant to daily online life.

There were 3.9 billion global email users in 2019, and the number is expected to grow to 4.48 billion users in 2024. This goes to show the vast potential of email as a marketing tool.

Businesses recognize this opportunity, which is why 81% of small businesses primarily use email to acquire customers, while 80% use email for customer retention. Email marketing is relatively cheap, while return on investment is massive.

I can attest to the benefits of email marketing, which has proven to be my biggest source of revenue at my ecommerce store over at BumblebeeLinens.com.

I’ve been able to sell many handkerchiefs and linens through my email list and email makes up approximately 30% of my overall sales.

Growing your email list allows you to spread the word about your products, build customer relationships, and generate sales.

Your lead magnet and opt-in form are vital elements to building your email list. As a basic definition, a lead magnet is a way to attract prospects to sign up on your email list, usually through free offers or valuable resources.

Meanwhile, an opt-in form is your means of getting your prospect’s information so you can add them to your list.

In this post, I explain in detail 7 email autoresponders that I employ with my ecommerce store that generate sales on autopilot.

You can find hundreds of rules and tips on email marketing, but it all comes down to treating your subscribers like humans.

Consistently offer value to your subscribers and the conversion rates will naturally follow.

Offer Free Shipping

shipping

Online shoppers are well aware of Amazon’s free shipping option, so your customers are likely to think twice if they see a shipping fee on your checkout page.

Back in 2017, our online store was getting an unusually high cart abandonment rate. After cold calling abandoned cart customers, I found out they were turned off by shipping costs.

Understandably, customers don’t like being cornered into paying extra costs. 63 percent of cart abandonments happen because of extra shipping costs.

As a solution, we introduced a lower free shipping threshold and new shopping tiers to improve our checkout rates without losing money to free shipping.

The idea is to offer trade-offs: customers can get free shipping if they’re willing to wait for their order for a significantly longer time, but they can pay extra if they want to expedite the delivery.

By simply providing options, you can win over your customers and increase your sales.

Also read: 5 Immediate Ways To Increase Your Average Order Value

Provide A Good User Experience

Website design is more than aesthetic. It’s about function. In fact, customers value usability much more than visual design.

Website Design

With this data in mind, make sure your customers can easily navigate your website and buy your product. To design a high converting website, put yourself in your customer’s shoes.

Ultimately, your website should provide a comfortable user experience from the first point of contact until checkout.

Here’s a list of tips you can apply to optimize your website for conversions:

  • Less is more. Avoid unnecessary graphics, widgets, and buttons that could distract your user and discourage them from staying on your website.
  • Show your credibility. By displaying trust factors such as your contact information, store hours, testimonials, and press mentions, you can earn the trust of your customer.
  • Test your website. By walking in your customer’s shoes, you’ll be able to spot website issues like grammatical errors, broken images, annoying popups, and slow loading pages that you can quickly fix.

These oversights could undermine your credibility and easily drive away your customers.

Also read: My Low Cost Website Redesign That Increased Conversion Rates 42% In 7 Weeks

Price Strategically

price war

Slashing your prices may seem like the way to compete with Amazon, but this strategy won’t do you good in the long run.

Amazon’s strength in numbers allows it to offer low prices while still making a good profit. If you run a small business, you can’t expect to apply the same strategy and earn a reasonable income.

However, the advantage you do have over Amazon is specializing in one niche and charging a premium for your products.

Case in point: 73% of millennials are willing to spend more money on sustainable products. Aside from this strategy, you can also come up with a realistic profit margin then price strategically with your goal in mind.

Pricing your products is often a process of trial and error. It comes down to finding a price point that works for your business.

List Your Products In Online Marketplaces

eggs in basket

To increase your chances of success, don’t put all your eggs in one basket. You can expand your customer reach by listing your products in relevant online marketplaces.

Amazon may be an obvious choice of platform due to its vast reach, but it also poses many risks beyond your control.

As an alternative, try exploring other online marketplaces suited to your niche.

For example, Ruby Lane is known as the best online selling site for vintage items.

Etsy is a go-to platform for handmade goods, and Chairish is where people go to buy high-quality furniture.

By listing your products on niche marketplaces, you’re making yourself visible to shoppers who are actively interested in your type of product. Just imagine the potential of having your target consumers all in one place.

Fix Hotspots In Your Sales Funnel

funnel

Managing an ecommerce business requires consistent testing and there are always changes to be made. Every page on your site should have a single purpose, to funnel your customer closer towards a purchase.

A sales funnel is your customers’ journey from discovering your brand to clicking the “buy” button.

Generally, the funnel can be outlined in four stages:

  • Awareness – When a potential customer comes across your business
  • Interest – When a potential customer explores your products or services
  • Decision – When a potential customer decides to buy or not buy your product
  • Action – When a customer buys your product

As the name implies, the number of customers you reach gets smaller as you go down the funnel.

And as customers leak out, you must consistently evaluate the results, and make changes to patch your funnel.

For example, you might notice a significant drop in potential customers during the checkout process. This could prompt you to modify your efforts to help users at the decision stage.

Perhaps you need to add a FAQ section or display customer reviews to assure your potential customers. These efforts could make all the difference in increasing your conversion rates.

A sales funnel allows you to view your results from the perspective of your customer so you can troubleshoot hotspots in your business.

Create An Easy Return Policy

returns

A return policy is a balancing act. If it’s unclear or too complicated, you could turn off a potential customer. Conversely, if you’re too generous, customers can abuse your return policy, costing you money.

Returns are a common concern among shoppers. In 2018, returned items amounted to $369 billion or 10% of all purchases. This number jumps up to 30% or more for solely online purchases.

Despite the potential loss of sales, a reasonable return policy can drastically increase your conversion rate.

According to a 2019 UPS survey, 73% of shoppers consider their overall returns experience before making a repeat purchase, and 68% said the experience influences their overall perception of the seller.

Moreover, another report said 55% of shoppers won’t shop with retailers with rigid return policies.

Online shopping comes with risks. Purchases might not fit, arrive damaged, or simply not meet a customer’s expectations. By offering a customer-friendly return policy, you’ll inspire trust in your customers.

Make sure the conditions are fair (for both you and your customer) and that they’re clearly laid out. When crafting your return policy, make sure to include these considerations:

  • Time Frame – Until when can customers contact you for returns?
  • Return Process – What steps should your customer take to return a purchase? Make it as simple and straightforward as possible.
  • Refunds – How much are you willing to refund? Should you ask your customer to shoulder the return shipping as a compromise?
  • Limitations – How can you ensure your product is returned in good condition? For example, you can state that the product has to be in its original form or packaging.

Ultimately, a clear returns and refunds policy can convince your customer to buy your product without fear of consequence.

Moreover, customers will realize that you stand by your product no matter what.

Learn How To Advertise

Advertise Here

The biggest fear most people have when launching their own website is learning how to build traffic.

After all, when you list an item on Amazon, there’s a built in market of hundreds of millions of shoppers immediately at your disposal.

But even though Amazon has a 50% market share of ecommerce in the US, there’s another half of the market that Amazon can’t reach. And in order to tap the other 50%, you must learn how to advertise and market your products.

There are many ways to advertise online which include the following…

It doesn’t matter which method that you choose. Just focus on one medium, do it well and you will easily take your business to 6 figures. Employ 2 or more and you’ll hit 7 figures with a customer list that you control.

Conclusion

Amazon’s huge success shouldn’t discourage you from pursuing an online business. Instead, learn what you can from Amazon’s success and fill the gaps.

Unlike Amazon, a small business has the opportunity to specialize and dominate in a particular niche.

Apply the tips above to your e-commerce business, and you’ll reap the amazing benefits of selling online.

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One thought on “Amazon Competitors – How To Beat Amazon And Diversify Sales”

  1. Janna says:

    I have read your review of ecommerce sites in the past. With the new Shopify app and fulfillment capabilities, would you recommend It over Big Commerce?

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