Competition for the business of marketplace sellers from giants like Amazon, Wal-Mart and Alibaba positions smaller online retailers for success.

For years, small businesses have looked up at e-commerce juggernauts like Amazon and Walmart with a sense of frustration and envy. Niche storefronts and smaller merchants often struggle given their limited visibility in the face of competition that seems larger than life.

However, it appears that perhaps the tide may be turning in favor of the little guy.

Rather than being stuck with the seemingly unachievable task of competing with Amazon and other giants, small businesses are now integrating with the platforms that were once their competitors. As a result, the onus is now on the marketplace providers to attract the most and best merchants.

Given that over 50% of Amazon’s GMV [gross merchandise value] currently comes from third-party sellers, the writing’s on the wall for merchants and the other marketplaces that want in on the action, which totaled nearly $23 billion in third-party sales in 2016.

The barriers to entry when it comes to selling products online is lower than ever, especially for those who leverage bigger e-commerce platforms in addition to their own digital storefronts.

advertisement

The Lay of the Land

The battle for supremacy in the world of e-commerce is obviously fierce among smaller merchants, but the same rings true for the bigger players in the space. After all, e-commerce now makes up nearly 12% of all retail sales, representing almost $400 billion in total sales. And there are certainly plenty of signals out there indicating that brick-and-mortar retail is suffering.

According to a recent report by Internet Retailer, Amazon alone accounted for nearly 70% of e-commerce growth in the past calendar year.

So how exactly does this spell good news for SMBs?

Amazon can no longer afford to ignore SMBs [small and medium-sized businesses], especially if they want to continue to grow at their current rate. Meanwhile, healthy competition amongst small merchants represents a win for both parties: SMBs get access to tons of potential customers and traffic while Amazon takes its share as well.

advertisement

Bear in mind that Amazon today faces fierce competition with Walmart and Alibaba when it comes to listing smaller merchants’ products. Walmart’s Marketplace for SMBs is still relatively young, all the while Alibaba is staking its claim on a global scale.

Over the course of the summer, many of the leading marketplaces unleashed aggressive initiatives aimed at attracting more sellers in time for the big holiday season e-commerce rush. Among the highlights:

  • Walmart has continued with a high volume of merchant onboarding, stating in a May earnings announcement that product diversity had grown from 10 million to 50 million listed items over the past year. As it scales, Walmart’s marketplace continues to offer superior seller support and lower commissions than Amazon.
  • In early July, Alibaba launched the “Taobao Global U.S. Merchants Network,” which enables American sellers to close distribution deals with Chinese companies who are especially successful on Alibaba’s various marketplace properties.
  • Later in July, Amazon sent emails to thousands of merchants offering to buy products at list price, in order to streamline new logistical arrangements for Fulfillment by Amazon (FBA).
  • In the weeks that followed, Amazon also announced that third-party sellers could now create their own branded storefronts with vanity URLs. Using the once exclusive Stores platform, SMB merchants can enter product keywords to auto-populate mini sites with custom designs.

As the big players continue to fight it out, SMBs must understand how they can capitalize on the ever-changing world of multi-platform e-commerce.

Why SMBs Have a Fighting Chance

The year-over-year recording-breaking e-commerce numbers signal that today’s web shoppers are happy to get out their wallets. The average yearly e-commerce marketplace spend at present sits at $488 per shopper according to a recent study by BigCommerce.

advertisement

Even more encouraging is the study’s findings when it comes to shoppers’ preference for online marketplaces over big brands’ sites. Nearly half search for products on marketplaces as their first destination, and they spend more on these sites than any others.

Fortunately, through an omnichannel e-commerce presence, smaller merchants can break through the noise and meet the needs of all potential customers, versus limiting their own reach.

An omnichannel presence as offered by centralized platforms is the ideal solution for small merchants looking to cover their basis. The ability to run your own storefront and operate a fully integrated store presence on social media as well as Amazon, Facebook and beyond, allows businesses to fire on all cylinders without spreading themselves too thin.

The numbers don’t lie, either: merchants can’t afford to miss out on any of these channels if they want to stay competitive in their respective niche.

For example, consider how integrating with a bigger e-commerce player can put your business on the international level.

advertisement

BigCommerce’s data indicates that in the United States, SMB same store sales are holding steady between 15-20% YoY growth, while they’re reaching growth rates exceeding 30% in markets like Australia, New Zealand and throughout Asia. BigCommerce’s software is made for synchronized selling across the world, with support for scores of languages, currencies and local payment gateways.

Additionally, modern businesses can’t ignore the rise of social shopping. Facebook alone is a treasure trove of traffic and sales: Shopify notes that two-thirds of all social orders come from Facebook. The same study notes that the average sale price is well over $50 on Twitter, Facebook, Pinterest and Instagram.

The future is bright for up-and-coming merchants, especially those with an omnichannel presence. By selling through more channels, smaller storefronts reap the benefits of bigger platforms and a larger base of customers.

What’s Next for SMBs and E-commerce?

The opportunities for modern storefronts are virtually endless. Given the current arms race between Amazon and its top competitors, SMBs that are able to leverage the channels available to them are poised for success.

advertisement

Rather than thinking of big-box stores as competition, it’s clear that piggybacking off profits is the natural next step for many smaller merchants. Again, there is business out there for the taking. It’s simply of question of whether or not indie merchants will adapt to these new opportunities or let them pass by.

TK DataSec Consultancy provides advice on e-commerce security.

Favorite