Is Amazon Killing Small Online Businesses?

Most people think of Amazon as an online bookstore, which manages to be both true and massively incorrect at the same time. Amazon started life as a bookstore, of course, one that could potentially sell you any book ever printed, but they’ve grown even bigger than that.

These days, Amazon is in the business of selling very nearly everything. I don’t know that you could buy a house or a car there, but they sell everything else short of that. They are a massively powerful retailer with a highly refined sales funnel, and it might seem impossible for a small online business to compete with that level of name recognition and money.

The sad truth is that for many, many online businesses, Amazon will eventually kill them, if it hasn’t already. Small independent book sellers, for instance, were some of the first retailers to embrace going online. It was hard to find out of print and rare books, so there was a ready made group of bibliophiles ready and waiting, and for a couple of years the online booksellers did well.

Until Amazon steam rollered over the top of them, using its massive economy of scale to offer both a bigger selection and better prices. There are still online booksellers out there, but the vast majority succumbed to the Amazon juggernaut.

Something similar has happened to online music stores and online DVD retailers as Amazon has continued to expand the range of products they offer. All in all, it certainly appears grim for the small online business, as Amazon’s expansion resembles those experienced by Wal-Mart or Tescos.

But in spite of that, there are more small online businesses than ever before. The world of online commerce is more refined and more vibrant than ever before, even with some powerhouse sites taking a huge chunk of the market share.

So how do you save your online business from becoming a victim of Amazon’s seemingly unstoppable growth? There are two ways that you can carve out your own unique spot on the Internet; you can do it through having a laser focus on a very specific niche, or you can do it through personality. Or you can combine the best of both worlds and use both.

Amazon does many things well, but it is still fundamentally a giant corporation, and that means it can’t even begin to have the same kind of one on one interaction that a small online business can have. If you make friends with your customers, they will stick with you and even pay a premium to do business with you. Personality is something that no corporation can beat you at.

Similarly, another thing you can do much better than Amazon can afford is fill a small niche. One of the wonderful things about the world, especially the world in the Internet age, is that you can find enough people like and want anything to keep a business running. Focus on your own personality and your niche and your small business can avoid being killed by Amazon.