What You Need To Know Before Starting An eCommerce Business


Libby Millar


Feb 15, 2023
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To start an eCommerce business, you’ll want to have a strong understanding of how to compete. In today’s article, we’ll go through five tips that will help you to compete in the increasingly competitive eCommerce industry. Make sure to subscribe to our newsletter at the bottom of this page to get timely tips straight to your inbox.

How to compete in a competitive retail market

Starting an eCommerce business is hard work and demands many steps and decisions that need to come together for success. The eCommerce landscape is global with many players – it’s dense! Marketplaces such as Amazon which host millions of products make it feel like the jungle.

So you’ve validated your idea, done your research and you have your product. Now how do you compete against other brands in the age of marketplaces? Amazon is Australia’s top marketplace, their 2018 revenues are reported to be more than $1 billion (across their three business divisions), followed by eBay. Amazon Australia is, at present, a long way from achieving the slice of the online retail market share that they hold in the US – 43%. The market share in Australia is still decentralised, spread across multiple marketplaces. Right now there’s plenty of opportunity to differentiate your brand from those found on global marketplaces. Here’s our tips on how to compete:

Run to the gaps in the market

You won’t succeed against businesses who drop ship on global marketplaces such as Amazon unless you compete on price. To do this successfully you need a huge scale. Look at niche markets, unique offerings, premium products and focus on customer service. Build your customers trust and be an expert in your product.  

Use sales channels over marketplaces

Instead of selling on marketplaces, use platforms such as Magento and Shopify to sell. You’re able to create customised sites and unique online customer experiences. However with your own site you’ll need a solid marketing strategy to drive traffic!

Use subscriptions and rewards

Once your customers know about your site and you as the expert, focus on keeping them engaged! Customer retention should be a KPI for your business – watch your customer churn rate closely. According to Business Insider, 48% of eCommerce sales come from repeat customers. They’re twice as likely to make a purchase than first time buyers.

Build rewards and loyalty programs to strengthen your relationship with your customers. You can build programs where customers receive special offers, discounts or bonuses. Membership programs are so effective that they’ve been reported to lead to retention rates of over 90 percent.

Introduce free shipping to your business

To be successful against your competition, you should provide shoppers with postage tracking details, free returns and free shipping. Depending on your profitability margins and business model, shipping could be free on every item or above a shopping cart minimum. Order fulfillment operations should also be streamlined to deliver in time to contribute to an end-end positive customer experience.

Create a positive customer experience

To retain your customers they must love your brand as well as the entire shopping experience. For eCommerce this starts from the load time of your website to the last mile delivery of your products. With the complex digital landscape it’s important to maintain a seamless online experience for your shoppers. With far fewer SKU’s you can outflank mammoth online retailers that are selling millions of products and design a clear and fluent experience on your site.