How to Stay Competitive in the Era of Easy eCommerce

The growth of the digital economy has opened up many new opportunities for starting a business online. Ten minutes spent creating a profile on eBay, Etsy, or Amazon, and anyone can get their products in front of hundreds of millions of active consumers who are already shopping and ready to buy. As a result of these booming online sales platforms, eCommerce consulting experts are constantly promoting the ease in which anyone can enter and succeed in the online marketplace.

Online Retail Has Never Looked Easier

Many eCommerce retailers state that the reason they started an eComm business was due to the low barrier to entry, as compared with an offline business. Although an eComm business can have just as many elements, expenses, and difficulties as an offline business, it can typically be started with a very minimal budget and then scaled up to a volume that can rival offline stores.

The basic elements of online retail are comprised of:

  1. Finding a product which is already in demand, at least to some degree.
  2. Finding a manufacturer to produce the product at a low price, allowing the seller room to mark it up for a profit.
  3. Getting that product listed on the selling platform and positioned where potential buyers can see it.
  4. Replenishing inventory and handling customer service issues.

Too Many Sellers Can Create A Race To The Bottom

However, the disadvantage with selling commodities online is that new entrants tend to drive prices to the bottom. The very factors that make eCommerce easy for a beginner are the same factors that make it easy for competitors to start flooding the market. If a market becomes saturated with the same product, the most rational thing to do (from a seller’s perspective) is to lower its price. This can work in the short run when the cost of goods can be reduced by purchasing in bulk, selecting cheaper shipping options, and looking for cheaper suppliers or labor. But eventually a product may reach a threshold where the original profit margins are whittled down to the point it becomes unprofitable to sell. How can an online retailer stay competitive in spite of this trend?

Sell Me This Pen

If your sole marketing strategy for selling products online is to present a product that is virtually identical to other products on the market, then your only option to gain a competitive advantage is to sell your product for a lower price than your competitors.

However, there is another option, which can keep you out of the downward spiral of price-cutting wars. In fact, if you take this alternate route, you can sell your product at your desired price, regardless of your competition’s price point. The way out of the trap is to make your product stand out from the competing products by superior sales copy, packaging, and presentation, which can elevate your products to where they are valued for more than their physical utility.

For example, if you sell smartphone cases, there is not much room to significantly improve the product itself. Even if you did, it would soon be copied by the competition, and you would once again be on a level playing field with your competitors. However, if you build the “image” of your cases, so that they are seen as something else–maybe as an extension of one’s identity, or a symbol of a certain type of lifestyle–then you have a valuable distinction that your competition won’t be able to copy, as it is actually a part of your branding.

Create Your Own Culture

You can further this distinction with well-written copy that creates an entire world around the image you have associated with your cases. One of the best examples of a company that has employed this technique to a high art form is Apple. In the rather unglamorous industry of computer manufacturing, where store shelves are stocked full of low-priced knock-offs which can all perform virtually identical functions, Apple has created a niche where their products sell at twice the price of their competition. This was accomplished not so much by providing a different product, but creating a different image of their product, company, and users. Apple brands themselves as an innovative challenger to the status quo of the technology industry and their users also see themselves as part of this culture, by using Apple products.

By focusing on differentiating your product from the ever-growing number of competitors, you will be able to carve out a niche where you have no competition, as you are in a niche of your own, which you have created with your brand and the unique positioning of your product.

In the end, the successful online retailers who survive beyond the gold-rush phase of eComm will be those who go the extra mile by distinguishing their products and their brands from the competition. Making the investment of putting this extra work into your product and brand is worth the effort and will keep you competitive in a market where the difficulty of entry is no longer a barrier to competitors.