If are thinking about starting a new e-commerce business or are simply trying to gain some traction in the space, we here at the Launch Box have one piece of advice – follow the market leader (psst – it’s Amazon).
It may sound a bit crazy, but we’re not recommending you try and ‘BE’ Amazon, we’re simply saying you need to emulate their way of doing business.
Here are the top 3 reasons why:
With global revenues of $233 billion in 2018 and over 100 million prime members in the US alone, your perspective customers are already shopping at Amazon.
Amazon’s mission statement is “to be the earth’s most customer-centric company …”, so, if you aren’t already familiar with how they operate, it’s a sure bet they have best-in-class customer service policies.
The company’s guiding philosophy under Jeff Bezos is “It’s always day 1”, ensuring that Amazon is constantly looking around the corner to find the next opportunity.
To put it all a bit more simply, no matter what you are selling, Amazon is the benchmark by which your business will be judged; and, if you can’t deliver a competitive experience, it’s unlikely you will attract and retain customers. We can already hear you rationalizing this statement away by saying your online store or product is unique, so let’s consider a couple of examples that illustrate why it’s so important to make sure you are playing on the same field.
Fulfillment
As the most important part of the e-commerce business model, an online retailer’s shipping and returns policies are effectively the backbone of their customer service policy. Accordingly, charging, or, worse yet, over-changing, customers for poor shipping or not having a generous return policy will cripple the business before it even gets started. Just think about how many times you have paused or walked away from buying something online because a shipping fee was dropped on you at checkout or the purchase was going to be final sale or non-refundable. You know what happens in that situation as well as we do – the customer opens a new browser window and looks to see if the item (or something similar) is available anywhere else, and, more often than not, they never make it back to their shopping cart. Our solution to this dilemma is simple – plan ahead, i.e., consider how you can offer a competitive shipping and fulfillment policy while you are developing your business model. For example, can you charge your customers an annual membership fee for access to benefits like free shipping, do you need customers to reach a certain spending threshold before you can offer free shipping, or can you charge a bit more for certain products in order to cover the shipping costs.
Innovation
No doubt about it, the digital revolution has transformed the way people communicate and do business, making it possible for entrepreneurs of all shapes and sizes to jump into the e-commerce game. Unfortunately, this also means running an online business today requires dealing with more competition and change than ever before, i.e., having a successful e-commerce store today doesn’t ensure you will have a successful e-commerce store tomorrow, so it is an absolute necessity that business owners never rest on their laurels. Amazon CEO, Jeff Bezos, perfectly asserts this idea with his Day 1 philosophy: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.” If you are thinking innovation is an impossible goal for a small business owner, we again offer a simple solution to the problem – stay engaged, i.e., monitor your competitor’s strategies and follow industry news sources to get a heads up on any new technology or trends that could impact your business (setting up targeted Google Alerts or following relevant Blogs is a great place to start). Lastly, and most importantly, take some time every month to look at your store and figure out what you could be doing better because innovation is really nothing more than a series of small improvements.
References:
