Amazon: If You Can’t Beat Them…

The Amazon River in South America is the largest river in the world, accounting for one fifth of the total water runoff on the planet.  It would stretch from New York City to Rome in length. The sheer size and volume of water it carries are hard to comprehend.  The eCommerce equivalent to the Amazon shares its name, almost as if they were planning on mirroring its magnitude. Whether or not that was the plan, it has become their reality.

Amazon.com is by all means a giant.  In 2015 they posted $107 billion in net revenue, had 304 million active users worldwide, had an online user reach of 82%, and a year-over-year net revenue growth of 20%.   Seemingly every time another company begins making strides in competing, Amazon buys them up (Zappos, Diapers.com, Woot).  When thinking about the size, the distribution network, the shipping cost advantages, the brand value, and the selection Amazon offers, the same question arises.  How does one compete against the likes of Amazon?

The common misconception is that you must compete against Amazon for your eCommerce business to succeed.  That unless you are able to think of a unique tactic to gain potential customer interest, you are doomed to fail because ultimately Amazon will be able to give them what they need for cheaper, and with faster shipping.  This despair seems to be fueled by the thought that Amazon creates and maintains their own product portfolio, and it’s theirs versus yours.  What many people do not realize about Amazon (and now Walmart, Jet, Sears, Newegg, etc.) is that Amazon is a marketplace – meaning that people who make or sell their own products are able to list them on Amazon and fulfill them out of their own location.  In fact, as of 2015, over 90% of all products on Amazon were third party items.

Joining Amazon, and being able to list your products for sale on Amazon, is easier than you might think.  And it opens up the entire 304 million member user base to search for and access your products.  This is particularly important considering that over 38% of online users now begin their eCommerce searches on Amazon, which surpasses searches that begin on search engines.

Amazon has not only created an eCommerce  juggernaut which for the time being seems to be poised for an indefinite reign, but it has also created an opportunity for other businesses to participate, and expand their reach past their own means.  In this sense, you don’t have to beat them, but you very well might benefit from joining them.