By September 26, 2018 Read More →

How to build a business that can compete with Amazon

The rise of e-commerce giants like Amazon has transformed how brands engage with consumers and Amazon ‘owns’ the largest share of the pie. Electrical equipment is one of the many industries that have become heavily commoditised in recent years, enabling Amazon to move in quickly. Paul Black, CEO, sales-i, offers some advice on how electrical wholesalers can compete.

It’s tough trying to compete, and some companies will choose to work with Amazon, rather than set up their own e-commerce platform. But what about those other product-based companies that are entering the e-commerce world on their own steam? The reality is that many are struggling to keep up. And this goes for businesses across all industries, including those operating in the electrical equipment industry.

The problem is that these businesses are trying to compete with Amazon. Given its reach and resources, this approach is unlikely to work. You’ll simply overextend yourself as you try to outdo Amazon on every new product and price – and in the process, forget about your number one priority: your customers. That’s not to say you can’t learn from Amazon and imitate certain processes and ideas, but they need to be relevant to your business needs.

A good place to start is to research Amazon’s success, review your current business model and look for areas that can be adapted and even improved. Part of this process is also about identifying which bits of your business work really well. What are your strengths? And how can you enhance them to really differentiate what you do from your competitors? Don’t try to be like Amazon, but rather build your offer so that it stands out in a crowded marketplace.

Here are five focus areas to help your business drive sales and hold its own against the likes of Amazon.

  1. Review your distribution channels

How you get your goods from point A to point B is crucial to your success as an electrical wholesaler. Your distribution network needs to operate like a well-oiled machine that delivers your products on time and in good condition. Reliability and speed are key to keeping sales consistent, as well as winning new business. It always pays to keep a beady eye on your processes and partners to ensure that turnaround times are as efficient as they can possibly be. If you haven’t reviewed your distribution channels recently, do so. Chances are you’ll spot some sensible ways in which you can reduce costs and improve efficiency.

If you’re a store with a primarily local customer base, a 48-hour delivery service is not much of a value-add. However, introducing a same-day delivery service within a certain mile radius could have a positive impact. Another idea is to offer an easy in store pick up service for customers that have bought their orders online. All in all, you want to make sure that the shopping experience you offer is easy, pleasant and convenient.

Given the industry you operate in, you’re probably no stranger to orders involving heavy or specialised equipment. In these instances, you and your distributors are actually far better positioned than Amazon to ensure successful delivery. Remember, know your strengths and use them to promote your expertise, as this will help you stand out.

  1. Reward your customers

Customer loyalty is essential to long-term business success. One way to encourage repeat business and build up a loyal base is to reward your customers. This can take many forms. You can give them a loyalty card that offers them a certain percentage off their tenth purchase. Or, you could introduce a referral program that rewards customers who bring you more business.

A repeat order program is a great way to reward regular customers – and it benefits your business too. It works by automatically refilling and shipping your customers’ regular order of, for example, batteries and other equipment. Of course, this is where data comes in. You need to stay on top of your customer information so that you can identify the accounts best suited for repeat order programs. You can also use this data to develop relevant content that your customer base will find compelling, such as industry updates and reviews of new products on offer.

To run a successful loyalty program, you need to know your customers. The more information you have about them, the more you can personalise your rewards and content. This way they feel acknowledged, and you have the insights you need to create impactful communications that drive results.

  1. Be a consultant not a salesperson

The modern salesperson needs to avoid any aggressive tactics if they want to win over customers. No matter how much pressure you might be feeling to make a sale, tone down the urgency and pay attention to the customer in front of you. Listen to their problems, answer their questions and offer relevant solutions. In other words, behave more like a consultant who can guide – rather than force – a purchasing decision.

Bear in mind that the Internet has opened up a world of information. Your typical customer now spends time online researching products before even stepping into a store. This means you and your team need to be as, if not more, informed about your and your competitors’ goods.

In fact, this is a great way to differentiate your business from Amazon. Its product range is enormous and there is just no way its salespeople can offer expert guidance on every item. As a smaller, more niche business, you can train your salespeople to become experts on your select product range. With in-depth knowledge, they can provide consultative advice and help customers with exactly what they need.

  1. Focus on relationships – not price

It’s highly unlikely that you’ll ever be able to beat Amazon on price. Its market domination and ever-increasing range of products enables it to offer low prices and regular special deals. Nonetheless, some companies discount their goods in an attempt to undercut Amazon and win over customers. There may be a short-term spike on your sales ledger, but this won’t translate into long-term growth.

Rather than cheapen your brand’s reputation with constant discounting, focus on your customers. You want to build loyal relationships with real people who keep coming back for more – and not because your prices are rock bottom, but because you offer quality, convenience and great service. Yes, consumers are price conscious, but the ones you want on your books are those looking for a trusted supplier who is available and responsive.

  1. Keep testing and trying

An experienced salesperson often has good instincts when it comes to customers and can make an educated guess from time to time. This is great, but it shouldn’t be your business’ default approach to customer engagement. You need to dive deeper and really get to know your customers, what they need, and how you can help them. And this is where being smaller than Amazon pays off in spades.

As a smaller outfit, you can set up simple A/B tests to check your communication channels are working optimally. Does your call-to-action copy get results? Are your online ads pushing traffic to your website? Is your audience responding better to a copy-driven message or a visual one? These test results will help you refine and enhance your marketing efforts.

Amazon is an impressive example of e-commerce power. It’s a vast business that keeps growing but the bigger it gets, the less personal it can be. And that’s the gap you need to focus on. Customers want to feel special, they want to be seen and acknowledged. Build a business that can provide a convenient buying experience – but is driven by its customer relationships.