Right now, Amazon is the largest online retailer in the entire world. So, actually beating them would be a pretty ambitious goal. You’re welcome
to it, of course, but most people who partake in eCommerce would probably be happy with far less. Either way, though, if you’re selling products online, you need to think about how Amazon could affect your bottom line. The same really goes for any online store too.
A site like Amazon actually provides a good introductory lesson to how smaller eCommerce sites should operate. You’re not going to beat Amazon in any way, shape or form that has to do with money. Amazon is bigger than you and has way more capital. So don’t even bother trying to undercut their price. They’ll always be able to go lower and they probably already have third party sellers who do (many vendors on Amazon sell at cost or even at a loss solely to pick up shipping addresses they compile into lists and sell off—you won’t be able to out-price those people).
You have a few very viable options though. The first is to simply pick products Amazon doesn’t sell. If you can make your own products, this is definitely one route to take. You could even sell a few on Amazon, Etsy, eBay and feature it on Pinterest to get the word out. This will also allow you to set the price at just about anything you want.
The other option is to provide services around a product that Amazon can’t touch. Although Amazon is a great site, they leave plenty of room for others to take market share by being better educators. Use blogs, videos, social media and anything else you can think of to establish yourself as an authority. Offer an email address that only customers can use should they have any questions. This will allow you to charge a price at least equal to Amazon.
Another option is to implement the advice in that last paragraph and then use affiliate links to sell products listed on Amazon. You’ll make less, but you’ll never have to worry about anyone undercutting you. Plus, you’ll have far less product overhead.
Beating Amazon may not be possible for a small business online, but that doesn’t mean you should give up. Instead, consider the above advice to carve out your own share of the market and then protect it vigorously.
Source:
http://www.shopify.com/blog/7571428-20-practical-tips-to-help-small-businesses-punch-above-their-weight