Life is not easy for smaller eCommerce retailers. The eCommerce market is dominated by giant platforms with global reach, buying superpowers, and bottomless product catalogues. Product manufacturers often retail their products through Amazon or eBay, making it difficult for smaller retailers to turn a profit by buying from those manufacturers and selling with a reasonable markup. Small eCommerce retailers have promotional budgets dwarfed by those of eCommerce behemoths. They have fewer promotional opportunities, can’t use loss leaders as widely as big retailers, and have fewer chances for successful cross-selling and upselling.
All of that said, unless your ambition is to be Amazon, I think the outlook for smaller eCommerce retailers is still rosy. It’s entirely possible for small, niche eCommerce retailers to build successful and sustainable businesses.
While by no means impossible, if you can find the right supplier, it can be difficult for smaller stores to compete against the buying power of a giant like Amazon for goods with a narrow profit margin. One alternative is to go up market and focus on goods that stand a greater markup. Prestige and niche products tend to have less price-sensitive customers. A word of warning though, to make a success with prestige niche goods, merchants have to focus on building a brand that will attract this sort of customer. Buyers of luxury goods and prestige products are sensitive to the experience and authenticity of an eCommerce store’s brand.
Focus On A Specific Niche
If you can find the right niche and market to it properly, it’s possible to build a loyal customer base that will keep coming back for more. Beardbrand is a good example of this approach. It sells high-quality products focused on a fairly specific niche: men with beards. More importantly, Beardbrand has invested in creating a brand that appeals strongly to a subset of bearded men. Its owners are outspoken beard wearers who exemplify an aspirational image that appeals to a community of beard enthusiasts — or “urban beardsmen” as the company puts it. You can get beard oil on Amazon — and for a lot cheaper — but buying from Beardbrand feels different.
Create An Awesome Experience
Take a look at the site of niche eCommerce retailer Bellroy. They sell high-quality wallets, and their website provides an excellent eCommerce experience. A small range of products has been thoughtfully selected and is sold with careful branding and placement on a site that makes excellent use of copy, images, and video. It’s all part of creating a premium experience that appeals to a market with the spending power to pay a little more for a quality experience — a market that highly values a thoughtful and authentic approach to sales.
With the right approach, small-scale eCommerce merchants can be successful if they stop chasing the lowest common denominator and focus on building a unique brand in a niche with passionate and informed customers who don’t mind spending a little extra.