Every year, selling on Amazon continues to get more competitive and I don’t see it getting easier anytime soon. Whenever there’s an opportunity to make money that is simple to understand, the masses always jump in and flood the market.
At some point, you have to know what you are doing in order to be successful and we’re pretty close to that point now. For example, several years ago you could just throw something up on Amazon and it would sell.
But today, Chinese sellers are undercutting the market and you really need to focus on establishing strong brand positioning in order to succeed.
You need to take a longer term view of your ecommerce business and put up strong barriers to entry.
Are you interested in creating a strong, defensible brand for your products? If so, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
Competition Is Everywhere
First off, here’s the truth about running an online store. As a small business owner, I am constantly defending my turf. New competitors are popping up every day and my job is to beat them back.
Every month, I meet with several mastermind groups and interview ecommerce experts on my podcast. And one of the common themes is how we’re all maintaining a balancing act with Amazon, Google, Facebook and Chinese sellers:)
And believe me, there are a lot of “what ifs”…
- What if the Google search spigot were to all of a sudden stop supplying an endless stream of customers?
- What if Amazon or Ebay bans your account?
- What if a bunch of random Chinese sellers start selling knockoffs of your products for half the price?
- What if someone hijacks your product listings on Amazon with counterfeit product?
- What if a group of competitors buy up your products and purposely leave negative reviews?
- What if Facebook decides to ban your ads account? (This actually happened to me last year but fortunately I was reinstated)
This stuff happens everyday and I’ve heard countless stories from people losing the majority of their revenues overnight because of an unhealthy dependence on 3rd party platforms.
In the past, I’ve talked about how owning your own website is one of the keys to success and that relying on Amazon or Ebay for 100% of your sales is risky as hell.
I’ve also written about the evil and malicious activity happening on Amazon right now which you can read about here
Editor’s Note: Here’s a list of Amazon alternatives and Ebay alternatives to diversify your sales.
But guess what? Owning your own website is also not enough.
You have to build a castle and a moat so other people can not enter in your space.
You have to have contingency plans in place in case a Google or an Amazon decides to ruin your day.
This post will teach you how to reduce your reliance on 3rd party platforms, beat back the competition, and future proof your business.
It’s split into 2 sections
- 4 Methods For Diversifying your Business
- The Single Most Important Strategy On How To Fight The CopyCats
Method #1: Sell Your Own Branded Products
Most people who become interested in ecommerce are initially attracted to dropshipping and I completely understand why. There’s something nice about taking orders online, sitting back and letting someone else carry inventory and ship product.
But dropshipped stores have the worst barriers to entry out of all the ecommerce business models. Since someone else is doing most of the work, your margins will be much lower.
And because you are selling other peoples’ products, there’s nothing to stop someone else from selling the exact same products at a lower price.
You have very little control over your pricing and supply which leads to a lot of fear, uncertainty and doubt. If I were running a pure dropshipped store today, my neurotic self would probably drive my wife crazy.
Related Reading: Why Dropshipping Isn’t As Easy And Simple As You Think
One way to take control of your shop is to start carrying your own branded products. While this may sound scary, carrying your own brand doesn’t necessarily mean that you have to design and create your own products from scratch.
In fact, certain manufacturers will allow you to slap your brand on an existing or slightly modified product and call it your own. This practice is called private labeling.
When you own your own brand, no one else can sell that exact same product which gives you pricing, supply control and drastically increased margins.
In this day and age, having your own brand is par for the course if you want a sustainable business.
Method #2: Sell In Multiple Marketplaces
When it comes to selling online, there are many distinct marketplaces to choose from which generally do not overlap with one another.
For example, some people go straight to Amazon for their shopping needs and don’t even bother looking anywhere else. As a result if you are not selling on Amazon, you could be missing out on a large pool of customers.
Similarly, some people go straight to Google and like to search online.
Some people go straight towards their favorite comparison shopping engine.
Some people love going on EBay for bargains.
If you are focusing all of your efforts on a single channel and one channel fails, you’re in trouble. These days, it pays to expose your brand to as many markets as possible that make sense for your business.
Here are the most straightforward ways to diversify
- Sell On Your Own Website – Your website is the only marketplace that you are 100% in control of. Click here to sign up for my free 6 day mini course for a detailed tutorial.
- Sell On Amazon – Amazon is the largest ecommerce marketplace right now so you definitely need to sell there. Here’s a comprehensive guide I wrote on how to sell private label products on Amazon
- Sell On EBay – If you are already selling on Amazon or your own store, you may as well list those same items on Ebay. There are services out there that will create Ebay listings for you automatically from your Amazon listings and fulfill using FBA
- Sell Internationally – Most sellers are afraid to expand beyond their own country but most markets outside of the US are far less competitive. Here’s a post I wrote on how to sell internationally on Amazon FBA
Ultimately, the core of your business should be anchored with your own branded website while experimenting with marketplaces like Amazon or EBay for additional revenue generating opportunities.
The key takeaway here is that you never want to have a single point of failure.
Method #3: Build An Audience
While your Amazon listings and Google rankings may fluctuate from month to month, the one thing that these two services can not takeaway is your customer list.
Make sure that you are gathering emails and building an audience at every possible opportunity.
This past year was incredibly successful for our store because we leveraged our existing email list.
We didn’t need any traffic from Google or Amazon. Large numbers of customers flocked to our website because we sent out regular emails to a list of highly targeted recipients.
And because these customers already knew about our brand, the conversion rate was extremely high.
In fact, even though only 12% of our customers are repeat, they make up over 36% of our sales.
Here are some great ways to bring existing customers back over and over again to increase your customer lifetime value
- Build An Email List – Email is probably the most straightforward way to future proof your business. Here are 5 email autoresponders your online store needs to automate sales
- Leverage Facebook Messenger Marketing – Over a billion users are on Messenger today. Here’s a comprehensive guide I wrote on how to leverage Messenger to increase your sales
- Build Retargeting Lists – Every person that visits your site needs to be pixeled so you can retarget them back to your site. Here’s a guide I wrote on how to leverage Facebook Dynamic Retargeting to achieve a 12X ROI
Overall, you need to make sure that you establish a line of communication between you and your fans who know and respect your brand. This can be done via email, messenger, Twitter, Facebook or any popular social media platform.
Method #4: Establish Relationships With B2B Customers
For my wedding linens business, my customer base is composed of 3 types of buyers.
- The Individual Consumer – These customers buy a bunch of hankies or linens for their wedding and are generally one time customers.
- The Crafter – These customers buy our handkerchiefs for various arts and crafts and generally come back on a regular basis with small orders.
- The Event Planner – These customers purchase our products in large volumes and come back for more on a regular basis.
Out of the above, which customers do you think are the most valuable from a business standpoint?
Which customers above would help a business form an impenetrable moat and result in more predictable revenues?
Which customers should I be focusing my efforts on?
If you answered “event planners” then you are correct!
Today, my top 10% of customers generate over 50% of our revenues. Why is this number so high? It’s because I focus on customers who are willing to spend more money on a regular basis!
Our B2B customers are very loyal, consistent and predictable. Even if Google were to reduce our search traffic to zero, we’d still have these customers.
The best way to find B2B customers is to look through your existing sales for anomalies. If an individual is buying an unusually large quantity of your products, they could be a business!
How To Create Strong Brand Positioning And Beat Chinese Sellers
If you use the 4 methods described above to increase your barriers to entry, you are well on your way to building a sustainable business. But there’s still the issue of competing against cheaper, knockoff products from China.
I’ve alluded to this already in my post on The Dangers Of Selling On Amazon And Horror Stories From Real Amazon Sellers but right now Amazon is getting flooded with a bunch of me too products.
People are simply going on Alibaba, finding a generic product, slapping their brand on it without any improvements and listing them online. At the same time, Chinese manufacturers are selling direct on Amazon and driving down prices.
When I spoke with hundreds of different Amazon sellers a few months ago, EVERY SINGLE ONE OF THEM has had at least one of their listings hijacked and lost money as a result.
There is no loyalty on Amazon! And unless your products have a reputation or a strong brand, you will eventually get undercut in price and die a losing battle of price erosion.
So the million dollar question becomes how do you combat these trends even if you have your own branded website?
How do you fight the copycats? Here’s what you need to do.
You Need To Become A Media Company And Not Just A Shop
If you look at all of my businesses today, I run a pretty random assortment of sites. What does selling hankies have to do with MyWifeQuitHerJob.com? What do linens have to do with running a podcast or a course?
While on the surface they seem like totally disparate entities with completely different business models, they all have one thing in common.
I treat all of my businesses as their own little miniature media companies.
Think about that for a moment…
A media company is a business that puts out content to gather a crowd of followers first in order to sell their goods instead of the other way around.
Why is being a media company important?
It’s because if you can gather an audience of loyal followers for your brand, it’s much harder to hijack your goods with a generic product.
It’s much harder to undercut you on price and completely erode your sales.
Why I Model All Of My Businesses After Disney
Disney is probably the most successful media company I know that kills it using this business model.
The other day I took my son toy shopping and when we came to the toy car aisle, I casually tried to steer him towards the cheap Matchbox cars which were on sale at an amazingly low price of 10 cars for 5 dollars.
“Look son! I will buy you either 10 super awesome Matchbox cars or 1 poorly made and cheap looking Lightning McQueen car”
And when my son started gravitating towards Lightning McQueen, I yelled out
“Wait!!! You can have 10 cars instead of 1!!! Wouldn’t you rather have 10 cars?!?!”
To which he replied…
“Daddy, I can’t play along with the Cars movie unless I have a real Lightning McQueen!”
How could I argue with that logic? So I ended up paying almost 10 bucks for a SINGLE car instead of buying 20 better made die cast metal Matchbox cars!
Disney owns my entire family and I simply can not get by purchasing a cheaper, knockoff product for my kids!
Emulating Disney For My Online Store
Now we all can’t be as far reaching as Disney but we can try to emulate them. Take a moment right now and look at your online store.
- Is your store just a listing of products or are you providing additional value?
- Is there any reason for someone to shop here as opposed to a competitor?
- Is there a sense of brand on any of your products?
- Are you trying to make a connection with your customer?
If the answer is “no” to all these questions, then your business probably won’t last the test of time.
In order to succeed in the long run, you have to gather a following.
That’s why my wife continues to put out great content on our online store blog.
That’s why we continue to put out fun arts and crafts projects using our products.
That’s why we gather email addresses and contact our customers on a regular basis.
In the long run, we are trying to establish subliminal mind share with our customers.
They may not be ready to buy at this very second. But when they do, I want them to shop at our online store.
Doing My Best Disney Impression For MyWifeQuitHerJob.com
If you take a look at my blog and my podcast, I’ve put out tons of free content on a consistent schedule for the past decade!
Every week, I write a blog post that is directly relevant to starting an ecommerce business. I also put out a free podcast episode where I interview other successful entrepreneurs to extract out their exact strategies for success.
Here’s what great about content.
When you give away something valuable on a regular basis, you can’t help but gather a following. And once you have that following, you can easily sell them whatever you have to offer.
For example when I launched my first webinar not long ago, do you think that I would have been able to make $60,000 in 1.5 hours if I didn’t have a following?
Let’s say I wanted to sell something random like a home repair course.
Even though I know absolutely nothing about home repair, a die hard MyWifeQuitHerJob.com fan might be inclined to take a chance on me because we’ve already established a connection through my content.
When you own the mindshare of your people, they will be more likely to buy from you.
When you own the mindshare of your people, your peeps will be more forgiving of your shortcomings.
Here’s another great example.
Over the years, we’ve attracted many loyal customers for our online wedding linens store who buy from us on a regular basis. One time we accidentally sold a bad quality product to one of our repeats.
But instead of getting angry about it and making a huge fuss, this customer ended up contacting us and politely gave us constructive feedback on how to improve the product.
And get this. They refused to take a refund because we’d been so good to them in the past.
Establish a connection with your customers!
How To Become A Media Company
The world of ecommerce is evolving at a very rapid pace. And if you simply have a website with a random listing of products, you aren’t going to succeed in the long run.
If you’re only selling on Amazon, you’ll never build mindshare because your products won’t stand out.
For example, which set of towels would you buy here? They all look the same! Do you think Amazon is a great place to establish your brand? No way!
Here’s what you need to be doing.
- You need to be building a die hard fan base.
- You need to be “dating” your customers before going in for the sale.
- You need to get into the mind of your customer so they are loyal to your brand.
So how do you do that?
Sometimes all it takes is a very unique and innovative product that naturally spreads via word of mouth.
But more likely than not, you will have to put in some legwork in the form of producing great content. Get out there and blog, podcast, write emails, make videos, post on Instagram, pin on Pinterest….whatever.
Ultimately, it doesn’t matter which medium you choose as long as you do it consistently.
But whatever you do, don’t just sit there and wait for customers to come to your listing of products.
Don’t just sit there and be satisfied pocketing your short term Amazon money.
Because at some point, someone is going to hijack you and undercut you in price unless you have your own customer base.
Ready To Get Serious About Starting An Online Business?
If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.
In this 6 day mini course, I reveal the steps that my wife and I took to earn 100 thousand dollars in the span of just a year. Best of all, it's free and you'll receive weekly ecommerce tips and strategies!
Related Posts In Fighting Dirty Amazon Sellers
- The Dangers Of Selling On Amazon And Horror Stories From Real Amazon Sellers
- Brand Positioning And The Best Way To Beat Chinese Sellers On Amazon
- Why Chinese Sellers Are Dominating Amazon And How To Beat Them
- How To Report A Seller On Amazon And Fight Hijackers Who Steal Or Piggyback On Your Listing
- Why Amazon Sucks For Building A Sustainable Ecommerce Business
Steve Chou is a highly recognized influencer in the ecommerce space and has taught thousands of students how to effectively sell physical products online over at ProfitableOnlineStore.com.
His blog, MyWifeQuitHerJob.com, has been featured in Forbes, Inc, The New York Times, Entrepreneur and MSNBC.
He's also a contributing author for BigCommerce, Klaviyo, ManyChat, Printful, Privy, CXL, Ecommerce Fuel, GlockApps, Privy, Social Media Examiner, Web Designer Depot, Sumo and other leading business publications.
In addition, he runs a popular ecommerce podcast, My Wife Quit Her Job, which is a top 25 marketing show on all of Apple Podcasts.
To stay up to date with all of the latest ecommerce trends, Steve runs a 7 figure ecommerce store, BumblebeeLinens.com, with his wife and puts on an annual ecommerce conference called The Sellers Summit.
Steve carries both a bachelors and a masters degree in electrical engineering from Stanford University. Despite majoring in electrical engineering, he spent a good portion of his graduate education studying entrepreneurship and the mechanics of running small businesses.
16 thoughts on “Brand Positioning And The Best Way To Beat Chinese Sellers On Amazon”
Excellent article – thanks for the information. There are a lot of things I can take away from this and I completely agree with diversifying your sales funnels (and ways of attracting customers) as reliance on 3rd parties for your own income is very risky.
Thanks moneystepper. Do you have an ecommerce store?
Always good stuff Steve…you consistently produce the very best content on the site and on the podcast. And every now and then I get to freaking out myself because there will always be change. From rankings that tank to new faces coming into the market, the online world will be ever evolving, and usually quickly.
Branding and your own personal product creation is truly the best defense…as it a wide diversification of traffic sources. And for us this includes ppc and other advertising…and quite possibly a podcast. Thanks go in part to your example!
Thanks Mark. Always appreciate your comments and look forward to what you have to say. How’s the golf business?
Haha…well since we’re right around freezing now in Iowa, the golf is taking a back seat to eating unhealthy holiday meals and dreaming of warmer days. Guess I should probably think about making more money too, and will do so once I’m out of the food coma.
You are correct.
I use dropshipping by now and thinking to have my own brand.
No need to produce it by myself, but other party will do it and I just put my brand (sticker, packaging, etc) on it. 🙂
Yep, having your own products is the best long term way of sustaining a business.
The fundamental reality is this about “starting an online business”: to build a web business the vast majority of (non-tech) people need an easy-to-follow, all-in-one, proven, ethical ebusiness-building system (not a get rich quick scheme) to get (1) a significant amount of traffic and get (2) targeted traffic. Otherwise you’ll end up having (and building) only a webSITE but not a webBUSINESS.
Steve can your write a post about advice for college students trying to start an online venture? The store would have to be built over a lengthy period of time due to the time restraints but how would you handle logistical problems such as where to store inventory and taking calls during the day when you may be in class or busy?
This website is my ultimate guidance for my online business 🙂 Thanks, Steve.
For me building the best defense is creating downstream product from my current business (textile printing) so when new competitors showed up, and the margin is getting competitive, I still have other channel of revenue. Also advertise regularly on google and doing marketing campaign like free gift, photo challenge on facebook. Everybody like gifts and it drives traffic like crazy to your site.
I’m learning a lot about entrepreneurship because of your blogs. I’ve always wanted to be my own boss but never found my niche until recently. I loved this article the most. I’m just so exciting for someone like you to put this kind of info out to people like me. It’s always good to talk to people with same passion and interest. Where do you think, I can find a mastermind group? Thank you!
How does one go about finding a product to put their brand on? This sounds just as hard as any other way to make money online. And what stops another person from putting their brand on the same product?
Steve you hit the nail on the head when you asked “What if someone hijacks your product listings on Amazon with counterfeit product?” I am going through that very situation right now. I have to revise all the images for my product listings to better protect my business. And I have almost 7,000 products! No easy task. I don’t think it’ll prevent people from continuing to steal my images but it will help me substantiate myself as the rightful owner of the images (which Amazon keeps questioning and adds insult to injury).
I’m probably wrong, but I feel like the reseller business on Amazon is a race to zero. Eventually the competition is going to become so intense that only a few sellers will really make any meaningful amount of money.
I agree with you
How does one go about finding a product to put their brand on?
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