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How Small Businesses Can Compete with Amazon

How Small Businesses Can Compete with Amazon

Let’s do away with the buzzwords, catchphrases, and seemingly endless talk about “digital transformation.” Most small businesses cannot compete with Walmart or Amazon in terms of logistical support and information technology. Walmart alone has poured billions into its supply chains and can source from millions of suppliers. Then they can turn around and leverage their shelf space to get lower pricing and betters deals. It’s the same with Amazon in a lot of ways, except they can also just wait out their competition, even going into debt to do so. Most small businesses can’t do that. However, that doesn’t mean that all hope is lost. In fact, while wealthy corporations like Amazon may be able to slash prices at the drop of a hat, they can’t compete with what small businesses do best. 

Local businesses matter, according to multiple sources and studies small businesses:

  • Create more equality for their communities
  • Provide greater economic opportunities and returns
  • Produce innovation
  • Contribute better jobs and retain more employees during economic downturns
  • Are linked to lower levels of poverty within a community
  • Provide more tax revenue for cities and communities

Small businesses can compete with Amazon by being personable. If there is one take-away from this article it’s that small businesses compete with Amazon by being more than just the product that’s on the shelf. Not only must your business strive to be unique and have its own niche, but it must double down helping out your neighbor. Here are eight ways small businesses can compete with Amazon.

Customer Service

Time and time again customer service pops up as the number one tool for how small businesses can compete with Amazon. The livelihood of your small business it’s going to depend a lot on the customer service that you offer. It cannot be like Amazon, in which it is automated away or you are speaking to someone that does not live in your community. An acute example of this is the auto repair industry. The auto repair industry is notorious for ripping customers off and flagging false repairs. Manufacturers can also be scammed as well. You need to view your customer services as a way to prove that you can offer a better service and an honest opinion based on experience. You need to build that relationship with the customer and show them that they matter. Your business doesn’t need just customer retention; it needs customers that advocate for you. Word of mouth is still king, after all. You can do this in a number of ways when your customer comes to you with a problem.

  • Explain in detail why your customer is having problems and the solution. This may mean that you will need to break down industry language into it’s simplest form. 
  • Invite customers to leave feedback on your website or in-person. Offer discounts if necessary when feedback is completed. Look for criticism that would make your company better. If you have repeat customers that leave feedback, prioritize those comments.
  • Provide common answers to issues with products or services on your website. Make it easy for customers to get ahold of you, whether through social media or your website. Have a clearly defined path for customers to get ahold of you. 

Customer service is the cornerstone for any small business that wants to compete with Amazon. However, this needs to be fully implemented throughout the business. Your customer service should start as soon as they walk in the door, which leads to the next point.

Hire better people

One of the best ways small businesses can compete with Amazon is by hiring better people. It can be tempting for small businesses to hire their friends or family to come work for them. In fact, that’s how most businesses start out. Yet, this may not be the best strategy. You need to be selective in who you hire. Find prospective employees that are going to bring a positive environment when customers walk in. Be upfront with them about what you expect when a customer walks in. 

This begs the question: “How can I attract employees to my business when I cannot pay top dollar?” Instead, offer them real-world experience and responsibilities that they can put on their resumé. Tell your employees that by investing in your business they are also investing in their own future. They will have applicable skills that will translate into other opportunities. Eventually, should your business grow, you’ll be able to afford top tier talent and retain them. That means that your small business needs excellent management. The model employee starts with you.

Establish an intuitive website

More and more customers are shopping online every day and you need a website so your small business can compete with Amazon. Your website should make contact with you or your business easy and simple. It should also allow customers to seamlessly order products and have them shipped to them or be picked up in-store. You can’t just have a website that tells people about your business. It should provide useful information, help you win clients over, list customer reviews, and show off your services or products. A website is also a great way to show off how you help your community and why you are important to your community.

In addition, your website also needs to be optimized for SEO (search engine optimization). This means that your website will rank highly on Google if someone were to search for “clothing store in Burbank California.” Google My Business is vital for success against big corporations. These technical aspects will help your website rank higher, thus leading to more people finding out about your business. Also, you need your website to be optimized for SEO because customers are doing more online research about a business before they make a purchase or step inside the doors. View it also as an extension of your customer service. If you sell valuable products or products that are complex, tell customers they can pick up in-store with expert advice. It’s a lot like going to the pharmacy, you (the expert) can provide additional information about a product that will help your customer be successful. You position yourself not as a gatekeeper, but as a small business that wants to empower customers. 

Social media marketing and the power of video

Social media marketing for small businesses can be tricky. Differentiating your business online can be tough, but let’s focus on a specific aspect of your social media. How can your content help and inform people? A lot of businesses forget that customers follow companies on social media not only because they want to see new products, but because they want help with something. Take this example Christian Carere mentions in an article by GoShare:

“Tiger Fitness is one of the many companies who go head to head with Amazon. They were able to build massive social media followings by posting videos on just about every problem a client ever encountered. Whenever a client would email a question the CEO himself would take the time to post a quick one minute video to answer the question because it represented first-hand what his client’s problems were and what they needed in terms of a value-based solution. By staying very focused on the client’s needs and providing value in the content you produce, your company identity becomes branded as a company that looks after their clients at the highest level.”

Offering this level of care through your social media is fantastic, but not everyone has the time to do this. On a much smaller scale, you can start a blog for your company or start a YouTube business account. Filming products and answer  to often asked questions can be a great way to reach out to your customers. Also, you shouldn’t just post about your business. Start posting about your community and become a source for people to come to find out and community events are happening. Target a local audience with your social media. 

The best advice for social media is to start small and know your target audience. What do they want? How can you help them? What is the best way to get their attention? This is how small businesses can compete with Amazon even when they don’t have a large online presence.

Set up a rewards system

Customers are always hard to come by when you’re not the biggest kid on the block. Use a rewards program to encourage repeat customers to come back, and show them that you appreciate their business. Another tactic is to offer free shipping for new customers who sign up for your email list. Doing tasks like this helps you let the customer know that you value their service. 

For example, my wife orders stickers from online Etsy sellers. These stickers aren’t your average run of the mill. Usually, they are hand-crafted and have specific designs. Because my wife has ordered multiple times (it may be an addition for her at this point), several of the Etsy shops have given her discounted shipping, reduced prices, and voting privileges on the next set of designs. Some have even included a thank you letter in her purchases for support. Rewarding those who stick by you goes a long way in how small businesses can compete with Amazon.

Simplify and improve your accounting

For some reason, accounting is almost never talked about for small businesses that need to stay competitive with Amazon. A CPA can help your business run smoother and more efficiently. Not only can they handle your bookkeeping, but they can prepare you for tax season as well. Some firms can also represent you should the IRS try to audit your business. These are just some of the perks. 

More importantly, a CPA makes sure that small businesses can compete with Amazon by helping you run a lean operation and analyzing data. They can help you track financial projections and what part of your business is actually working for you. CPAs can help you divert your funds to areas where you need to improve or cut your losses. They can help you look for new areas of growth and track what strategies are working. Essentially they can help you establish  if a marketing campaign was successful or not. You can also work on a long-term plan for growth. 

Be a part of your community

Remember the section earlier about the importance of making social media posts about events coming up in your community? Not only will you want to do that, but you actually want to engage with the community. People are far more likely to shop at your business if they know that their hard-earned dollars are going to also be going to a charity or fundraiser for the local kid’s softball team. Importantly, being active in your community is going to put you in touch with leaders and other businesses as well. These connections can be important when customers are looking for referrals or recommendations. Hold raffles, compete in cookoffs, sponsor a highschool baseball team’s shirts to make an impact in your community. 

Not only is this good for social media, but it’s a great way to show off your customer service. Let the local community know that you’re an average person who wants to see the people around them do well also. Amazon can’t compete with that.

Be upfront about what you are and what you do

Finally, be crystal clear about what your company does and how they conduct business. If a customer comes to your website, they shouldn’t be confused about what services or products you offer. If they can’t understand what you’re about, then they’ll just go to another site or store. Be open as well about how you conduct your business and never flaunt authorities. Build your reputation by showing that you have integrity and ethics.

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