As was discussed last week, there is a huge problem facing small to midsized e-commerce and online catalog companies. They’re being forced out of the market. Mega-retailers like Amazon are so big and hold such large shares of the common markets that they drive out all competition. For those online businesses that wish not to get pushed out of the game, the solution lies with selling to a particular niche.
Why will that work?
When you’re a small or midsized online store, you’re incredibly vulnerable to the whims of the big guys. If Amazon decides to drop its prices on books or soaps, you’ll see a drop in sales unless you drop your price too. A mega-retailer, however, can let their price fall much farther than you because they move so much volume that millions of dollars are still pouring in–and they do this across all the major markets.
No one business can have it all, however. While the mega-retailers do sell in many major markets, those remaining are not necessarily unprofitable. For small and midsized web businesses looking to thrive, the best option is to tap into these untouched minor markets. Consider trying a new big-picture approach: You’re not selling goods, you’re occupying market space. The more of it, the better.
What happens if they find my niche?
Wondering about the security of your niche stronghold is definitely legitimate. They may decide to move into your market. After all, mega-retailers aren’t looking to stop growing anytime soon.
Niche-selling is a bit like working in the shadows. You hide where they can’t find you and occupy the untapped market for as long as you can, all the while hoping that eBay doesn’t come around the corner with a flashlight and yell “Gotcha!” Your business will always be susceptible to competition, especially if you’re finding success. If a big competitor notices how well you’re doing, you’ll probably see your supplier’s products on the virtual shelves of a megaretailer's website–and they’ll probably be cheaper too.
Are you saying I’m doomed?
No way! There’s still hope, but figuring out how to keep your product line from being undercut is suddenly a big deal. Even if your business is established enough in your new niche to withstand the new competition, you’ll likely lose at least some customers who can’t resist the lower prices. How can a business position itself so as not to fall victim to the battle with those big guys? Don’t just own the right to sell someone else’s products, own the product! When the product is yours, Amazon, eBay and all the rest can’t sell it without your permission. It’s an area where they simply are not permitted to compete.
How do I do that?
If you’ve got time, money and an idea available, then you just combine them together to create something new. If like most small-to-midsized e-commerce companies, you just can’t balance a full-on product development squad, then you bring in experts! Alphidia can help create an idea, design it, develop prototypes and even assist in early market manufacturing! There’s no reason to let mega-retailers shove you out of the market. With the right products, you won’t just sell in a niche–you’ll own it.