Jan 05, 2021

How to compete with Amazon

At the time of this writing, Amazon has a $1.6T market cap. They provide inexpensive products nearly instantaneously with their unrivaled distribution network. How can you possibly compete with that?

You won’t be able to charge less.

Your product or service won’t be easier to order.

You can’t deliver faster.

But Amazon does have an Achilles heel. Seth Godin described it best in his podcast:

Amazon has built an institution that is good at selling everything but has no ability to sell anything.

What does this mean? This is how I interpreted it:

If you need a pair of shoes, you can go to Amazon and find a pair at an unbeatable price and get it delivered in an unbeatable amount of time. But if you want to buy the best pair of shoes for you, Amazon is a pretty shit place to do this.

Their reviews mean nothing. All of the things I have bought from Amazon are at least four stars but I have had widely varying degrees of satisfaction with the products I have received.

I don’t blame Amazon for this. It is a difficult problem to solve when you sell everything.

But here, lies the key to beating Amazon. Be specific because Amazon can only be generic. Make the best niche thing for a small subset of people and earn their trust and loyalty. They will be happy to choose you over Amazon.