How To Dig A Moat For Your Online Store And Keep Your Competitors Away

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Once every month, I meet with a small ecommerce mastermind group and discuss various strategies to improve our businesses.

If you are not participating in a mastermind group of some kind, I highly recommend that you join one or form your own.

No matter how good or how smart you are, there is always something that you are not doing or thinking about. And for me, I learn something new after every session. In fact, this particular post was inspired from my last meeting.


Today I want to talk to you about my fears and my doubts regarding the future of my online businesses.

Yes, you heard that correctly. When it comes to my online store and my blog, every now and then I get a little scared.

No matter how well your business is doing or how well it is perceived, every business owner has doubts and I’m certainly no exception.

While I try to maintain an accurate portrayal of what it’s like to run my online store on this blog, sometimes readers get the false impression that it’s always smooth sailing all the way. But it’s not…

Competition Is Everywhere


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.

In my last mastermind session, we also joked about how we’re all living in constant fear of Amazon and Google.

When you own your own website and store, chances are that you derive a lot of business from Google search.

Well what if the Google search spigot were to all of a sudden stop supplying an endless stream of customers?

If you sell on Amazon or Ebay, what if you unexpectedly get banned from selling on their platform ever again?

What if a bunch of random people 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?

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.

But owning your own website is also not enough. You have 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. Here are some ways to create high barriers to entry for your online store.

Sell Your Own Branded Products

blank tape

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.

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 product and call it your own. This practice is called white 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.

Sell In Multiple Marketplaces

Amazon Ebay Google

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 like using Google Shopping.

Some people go straight towards their favorite comparison shopping engine like Nextag or Pricegrabber.

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.

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.

Gather Emails


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 at every possible opportunity.

This past Black Friday was incredible for our store because we ran a special sale exclusively for our email list. We didn’t need any traffic from Google or Amazon. Large numbers of customers flocked to our website because we sent out a single email to a list of highly targeted recipients.

And because these customers already knew about our brand, the conversion rate was extremely high.

Make sure you establish a line of communication between you and your fans who know and respect your brand. This can be done via email, Twitter, Facebook or any popular social media platform.

My favorite weapon of choice is email! (We use Aweber)

Establish Relationships With B2B Customers


One of my key takeaways from my last mastermind meeting was that I need to put more emphasis on my 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?

Up until this point, we have not been doing a great job of trying to acquire new B2B customers. But here’s the thing.

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.

Plus, they provide a significant source of revenue for our business.

Ecommerce Is Evolving

When it comes to running any business, it’s not a set it and forget it endeavor. While I would love to just sit back, do nothing and collect paychecks all day, I have to constantly worry about building a larger moat for our business.

But this is what makes business fun and I love the challenge. How are you building a moat for your business? Please let me know in the comments section!

photo credit: w4nd3rl0st (InspiredinDesMoines) PeterThoeny ydhsu

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13 thoughts on “How To Dig A Moat For Your Online Store And Keep Your Competitors Away”

  1. 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 again!

    1. Thanks moneystepper. Do you have an ecommerce store?

  2. Mark says:

    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!

    1. Thanks Mark. Always appreciate your comments and look forward to what you have to say. How’s the golf business?

      1. Mark says:

        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.

  3. 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. :)

    1. Yep, having your own products is the best long term way of sustaining a business.

  4. PlayBug says:

    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.

  5. Alex says:

    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?

  6. 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.

  7. Thelma says:

    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!

  8. Susan says:

    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?

  9. Cindy says:

    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).

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