Amazon Pricing: How to Compete if Not Lose

Amazon Pricing: How to Compete if Not Lose

March 19, 2018

Estimated reading time: 11 minutes

Are you putting off starting your eCommerce business because you worry you won’t be able to compete with the likes of Amazon?

You worry that you spend weeks, or even months researching a product you want to sell, building your website and creating compelling Facebook ads, only for people to buy your exact product from Amazon instead.

Well, you’re not alone.

Many potential wannabe eCommerce merchants stall launching their business because they simply can’t compete on price with the giant: Amazon.

Your worry is not in vain though.

Amazon is huge. In fact, their market net value is worth $702.46 billion and as a result, can charge less than the average eCommerce store owner for products. Also, 55% of online shoppers in 2017 begin their product searches on Amazon.

This doesn’t mean you shouldn’t launch, though.

In this article, we’re going to look at a number of ways you can still create a winning eCommerce business and compete with Amazon.

Focus on building a brand

First, you need to remember that Amazon as a brand caters to everyone. While it will be difficult to compete with Amazon in terms of the number of products you can offer, you can focus on building a brand and finding your niche.

You can go to Amazon to buy absolutely everything from Spatulas

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To dog food.

And because of that Amazon has to brand itself as the ‘everything store’. Their unique selling points are their safe purchasing solutions, often low prices, easy return policies and unbiased reviews from actual users.

But where they struggle (and where you can compete) is by building a brand. Through building a brand and finding your niche, you can really work out what you’re best at.

Don’t try and compete with Amazon and create a general store with no real coherence as to what you sell.

Instead, focus on dominating one industry and becoming the expert at it. When you do this, it’ll be much easier for you to create compelling product descriptions and content around that topic to highlight your brand expertise.

User experience will be everything

Whether you’ve already got your e-commerce store up and running, or you’re looking to start one soon, you need to make sure your user experience is perfect.

User experience refers simply to the way the user navigates your site.As a general golden rule, it should be easy for any customer to come to your site, find what they’re looking for and make a purchase with relative ease.

Think about Amazon.

There are so many products, so many different things to buy. At times it can become overwhelming trying to find exactly what you want. Especially when some of the products on Amazon are often low quality.

Because Amazon is able to offer such low prices, they often target budget shoppers who are simply looking for a deal.

When you’re met with customers who are happy to pay a premium for their products, you have a greater chance of attracting them.

For example, BeardBrand company are your one stop shop for beard products.

Their easy to use website navigation allows customers to quickly find what they’re looking for.

They can choose from a number of options: ‘cleanse’, ‘care’, ‘style’, ‘represent.

Let’s suppose they clicked “cleanse”.They can then choose from a number of options.

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If they know they’re looking for a beard softener, they can simply click the middle icon where they’ll be able to choose from a number of different products in that line.

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The difference with doing this on this website as opposed to Amazon is it takes your customers on a journey and is especially helpful for those who are unsure what products they need.

The alternative on Amazon will see you entering “beard products” to which you’re met with over 40,000 products. That’s a lot to sift through to find what you’re looking for.

compete with amazon

Can you offer free shipping?

You all know about Amazon Prime. They offer unlimited free delivery on their “prime” items, many arriving next day, or in some cases, the same day.

compete with amazon

This accessibility is probably not something you’ll be able to manage at scale, but figure out if there is a way to provide free shipping to your customers.

For example, mattress company Casper offer both free shipping and free returns.

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And while they can’t promise free next day delivery, they do promise to deliver within 1-3 days and offer all customers details about their tracking alongside a zero commitment clause.

Meaning, you can buy their mattress, try it at home and if you don’t like it, you can send it back. All for free.

Does this method work?

Well in 2016, Casper had sales of around $200 million.

So even though they can’t compete with Amazon on price for all of their mattresses, by building a brand people love and offering great perks like free shipping and returns, customers feel happy and confident buying from them.

Loyalty is key to compete with Amazon

The benefit of building a brand is that customers come to know you. You can offer personalized services that Amazon just can’t quite deliver yet.

For certain niche’s buying from Amazon just doesn’t make sense. Let’s think about the spectacles industry.

For most people who wear glasses, they prefer to go to the store. This is because they can try them on.

Not every frame will suit every face and because people wear glasses a lot during their day, it’s important you get a pair that looks and suits your face.

This isn’t to say that the glasses industry can’t be done online. Not at all.

If you wanted to, you could buy glasses from Amazon.

But how do you know if this frame will suit you?

What do you do if the arms on the glasses are the wrong size? You have to take them back and find a different pair.

On the whole, buying a product like reading glasses from Amazon is a difficult and time-consuming process. They also make it difficult to choose a specific product variant.

On the other hand, glasses company Cubitts have combated this approach by offering any and all customers a free trial at home.

compete with amazon

How it works?

Customers can choose up to four frames from their website and they’re sent to the customer who can try them for five days, for free. Shipping and returns are also free.

How are Cubitts able to do this?

Simply because it fosters brand loyalty and trust.

They trust in their products so much, they’re certain you’ll find a pair you will like. Because they’ve niched down and focuses only on eyewear, they’re able to provide a great user experience where customers can easily decide the type of frames they want to try and can even see images of actual people wearing each frame.

compete with amazon

Content is king

One thing you can do to compete with Amazon, and therefore charge higher prices to increase your profit margins is by creating compelling content around your product.

Evelo Bikes are a great example of this. Evelo Bikes are an electric bike company with benefits such as a four-year warranty and an at home trial.

Yes, you can buy an electric bike on Amazon.

The difference between the bike listed on Amazon and the one below from Evelo doesn’t just fall down to price.

You have to ask yourself, if you can’t compete with Amazon on price, then how does Evelo manage to sell bikes from their website at a significantly higher price and still manage to make money and become a profitable company.

Well, it all falls down to content and branding.

Each bike product page comes with an extensive spec list that really breaks down the finer details of what each bike entails. They also allow you to watch videos of each bike in action to give you a better idea of what you might look like when riding.

Evelo is known as the ‘electric bike’ people. It’s all they do. Their entire website is tailored to helping people learn more about, and eventually, buy their own electric bike.

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Therefore, they are able to provide an extensive amount of content about each individual bike and the benefits of actually riding an electric bike.

Because they’ve niched down and built a brand, they are able to offer content throughout the entire funnel. Meaning, people can come to Evelo when they’re just wanting to learn more about electric bikes, or when they’re ready to hit purchase.

And because Evelo creates so much content about electric bikes, trust is built with potential customers.

Their excellent customer service team and the ability to try at home before you commit to buying, are all extra ways they can compete with the likes of Amazon and still make a profit.

So when you have niched down and built your brand, consider creating content for all stages of the funnel to attract, convert and delight your potential and current customers.

Compete with Amazon Takeaways

By nature of their size, Amazon is a marketplace with a significant share of the market. This doesn’t mean you can’t compete with them.

Following the strategies in this article, and ensuring you’re not just trying to compete on pricing will encourage your customers to return to you again and again.

Building a successful brand and putting the customer at the forefront of everything you do will take you from hobbyist e-commerce owner to a renowned business with hoards of fans just waiting to wax lyrical about you.

And if you do want to track your competitors’ (including Amazon) pricing, why not use our tool: Prisync.

Don’t get hung up trying to compete with every aspect of Amazon. Yes, you will lose some customers to the marketplace, but see Amazon as a guide and allow it to support your own eCommerce price strategy as opposed to dictate it.

What methods have you used to compete against Amazon? Leave a comment below.


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