I wrote a post on Starlit Citadel’s business blog. Yeah, yeah I should write more article here too. I will…
Anyway, the discussion was with relation to how some of the major e-commerce businesses out there can run losses for a much longer period than we can, and as such structure their company in such a way that they can / will make those losses.
I mean, when a public company is losing 80% of their revenue to COGs and Fulfilment, even minor variations in things like IT, Marketing and the like can seriously affect the profitability of the business.
I’m not sure I’d call it unfair per se – it is the field we entered and created in many ways, but it’s still a playing field that is heavily weighted in their favour. So the trick for a small business is to learn to not compete directly against them.
Whether it’s entering a business sector that they have no interest in or perhaps taking advantage of a geographic benefit, you need to be able to compete on things other than free shipping and price.
What’s your answer to the Amazon’s & ThinkGeek’s of the world?