There is a new power struggle between e-commerce industry giants, but it is for the benefit of smaller businesses. The once-dominant Amazon Marketplace is losing vendors and customers to smaller sites such as Shopify, which gives merchants a platform to create their own stores with more control than other, larger e-commerce companies.
According to a new article by Business Insider, Shopify overtook Amazon in unique monthly visitors last quarter, boasting an average of 1.16 billion unique visitors compared to Amazon’s 1.10 billion from April to June. The data predicts that Shopify will continue to pull away from Amazon this quarter, too, as it is on track to grow to 1.22 billion unique users per month, while Amazon will only reach 1.13 billion active monthly accounts.
Business Insider believes this is because Shopify is attracting more online merchants with its reliance on merchant store independence, so those merchants are leaving Amazon Marketplace and bringing their customers with them. Here is what you need to know about the current landscape before deciding which platform to put your online store on.
SHOPIFY VERSUS AMAZON
Amazon has a wide variety of tools that e-commerce businesses, regardless of size, can take advantage of to easily sell online, including offering a space for merchants to sell products directly to customers and allowing vendors to store and manage their inventories at Amazon’s own facilities. Companies can also pay to have their products show up sooner in search results; the more brands pay, the more likely their merchandise will show up at the top of relevant searches.
According to an article by CNBC, Amazon recently doubled the amount of “sponsored” listings that show up at the top of search results, which drops organic results further down the page and makes it harder for smaller merchants to get exposure for their products. Prices for these ads are also increasing, making those ads only affordable for larger brands who already have the financial resources to spend on them and giving those companies search engine optimization preference over smaller vendors.
As a simple product search on Amazon will show, major brands are taking advantage of this and are spending large amounts of money on sponsored posts alongside Google paid search ads, dominating search results and diminishing the online presence of younger enterprises.
This has forced many smaller businesses to look for other platforms to sell their products on, specifically ones that offer similar features and exposure that Amazon does without the high costs that Amazon demands to continue using those assets.
Shopify has established itself as a leading contender that is well suited to small e-commerce companies. The site’s number one attraction is its comprehensive tools that make it fast and easy to set up an online store so businesses can get their site up and running quickly with no hassle or learning curve.
The service also has a number of payment plans that allow businesses to choose how much they want their startup and running costs to be every month, without tacking on additional charges for inventory management, shipping and marketing.
Shopify’s other features include dropshipping for hands-free inventory management and selling, a built-in app store for easy integration with exterior services, partnerships with major platforms such as TikTok and Google Shopping that make it easy for customers to market on social media and a solid track record for helpful and responsive customer support.
Amazon may still be a necessity to businesses with the resources to pay for its services and who need the massive reach that Amazon can provide, but brands who are frustrated with the selling experience on Amazon should consider alternatives.
HOW TO ADJUST TO THE NEW E-COMMERCE LANDSCAPE
Whether you want to switch to Shopify or find another way to establish your brand, there are two major goals you should keep in mind that will help your small business thrive in today’s e-commerce climate.
The first goal is to take steps to detach your company from whatever site your store is on and eventually build your own e-commerce platform once you have the resources to do so, which will give you full control of your company’s logistics, marketing and sales.
Another part of this is tailoring your site experience to build your own base of customers rather than using a larger platform’s ecosystem to “borrow” customers from those sites. This can include creating an email list to keep customers informed and engaged with your site and creating a chatbot that performs basic functions to make it easy for customers to get answers and navigate the site better. Shopify has the tools to create these features easily.
Second, you should find ways to decrease your ad spending but maximize reach, which will help you save money on advertising and increase your profit margins. You can do this by taking advantage of the abundance of free e-commerce tools that many larger sites offer, including the “shopping” services on Facebook, Instagram, Google and TikTok. TikTok itself is an invaluable marketing opportunity right now, as it is easy to create and share low-cost native ads that integrate well into this exploding social media platform’s ecosystem.
A marketing agency like Kahn Media can help you advertise your business on any of these platforms or elsewhere on the web.