9 Reasons Why Amazon Is Outselling You

Ever wonder how Amazon gets so many sales? Here the top 9 reasons why this ecommerce marketplace is outselling your online store.

Over the past 20 years, Amazon has cemented itself as the leading online retailer, amassing more than $400 billion in online sales. What started as a book reselling business in a two-car garage in the 90s has now grown into a conglomerate that’s doing more business than Wal-Mart.

A quick look at these recent Amazon statistics is telling:

  • Average Prime user spends $625 per year (Business Insider).
  • 20 million products are available for Amazon Prime (Recode.net).
  • 78% of consumers pay for Amazon Prime to get free two-day shipping (eMarketer).
  • 11% of Baby Boomers use Amazon Prime (eMarketer).
  • 16% of Generation X uses Amazon Prime (eMarketer).
  • 19% of Millennials use Amazon Prime (eMarketer).
  • 30% of online shoppers in the U.S. have a Prime membership (Forbes).
  • Amazon loses between $1 to $2 billion on shipping Prime goods each year (Forbes).
  • 49% of Prime members spend $800 or more per year (Business Insider).
  • 41% of Prime members exceed $800 in spending during the first year (Business Insider).
  • Prime uses a free shipping threshold that starts at $35 per purchase (Fast Company).

Just how profitable is Amazon these days? Aside from the fact that its founder, Jeff Bezos, is the richest man in the world, Amazon’s net worth and annual revenue haul outdoes America’s top-four brick and mortar retailers by a longshot.

Back in 2017, Amazon began shifting its focus to millenial shoppers, knowing that they were the future of ecommerce.

“Every major trend we see across 2017 can be explained by the fact that more of Amazon’s core demographic (millennials) are growing up: they’re increasingly owning homes, raising children, and buying a TON of stuff to go with it,” explained One Click Retail CEO Spencer Millerberg in his annual report.

He then added: “This raises the question: will this create long-term changes and tailwinds for Amazon? Will 300-ish Whole Foods stores be enough to compete meaningfully in the brick-and-mortar space against Walmart’s 4000+ stores?”

Today it’s one of the preferred online destinations for millenials and the generation that will follow them next.

Amongst the countless lessons that can be learned from Amazon’s humble rise in ecommerce to the mighty force it is today are these following nine that all retailers should borrow from.

1. Overall Selection

Certainly, you can’t really compare most online stores to Amazon. That’s because it’s a massive marketplace. Amazon’s 100 million annual shoppers purchased 5 billion products from the retailer in 2017 alone, helping the 2 million merchants selling on this platform generate hundreds of billions of dollars.

Considering its enormous size and scope, Amazon will always have more selection than any other competing store.  To stay relevant, you can borrow a page from this behemoth by improving that selection that’s being offered at your online store.

Conducting simple research into the most popular brands will help you decide what people are buying the most of and why. This can provide you with insight and depth as to what you could be stocking your store with to help improve sales and competitiveness.

2. New & Refurbished Options

If you are unable to offer refurbished options, it’s not the end of the world. But, you always do have the choice to partner with a drop shipper and sell the same item as used or refurbished at a discounted price.

Partnering with a refurbished drop shipping service can enable you to at least capture sales that may have gone to a competitor, even if you do not profit as much on the individual sale. This helps you stay in the sights of the same consumer for future sales, enabling you to earn new profits from them in the long run.

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While it can be hard to compete with Amazon on the first two entries of this list, cross-sells are a place where all stores can succeed. Depending upon the shopping cart that you are using, there are a variety of plugins that you can use to cross-sell other items.

As this screenshot below suggest, shoppers of this specific HDTV are going to need accessories, like a wall mount, which can increase the average order value exponentially. Imagine how many cross-sell opportunities you’d miss out on if this feature wasn’t enabled in your online store.

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3. Installation Services

Amazon has recently started offering is installation options as a unique value add-on. Don’t want to assemble that big table and chairs you ordered, no worries. Need help installing a TV wall mount or ceiling fan, they’ve got you covered … for the right price, of course

There’s no reason why your store couldn’t team up with a services provider and add this as an amenity during checkout, either. By partnering with regional and nationally based professional contracting services, you could create a powerful upsell opportunity that could improve customer service and generate more profits for your store.

4. Fast, Cheap & Usually Free Shipping

People want to know that they won’t have to wait to get the products they’ve ordered online. They want their products delivered quickly with expedited shipping options being made available or they are likely to take their business elsewhere.

What’s more, shoppers want to know that there is a free shipping threshold on their order, which has also been proven to increase the average order value.

Here are the stats on that:

  • 67% of your shoppers want to be offered an expedited shipping option. If you can offer this, you can increase your sales.
  • 55% of online shoppers are likelier to abandon shopping carts that don’t offer free shipping. Free shipping promotes a 15-20% increase in sales.
  • 22% of your customers want the shipping cost to be stated upfront and early during the checkout process. This reduce cart abandonment drastically.

While you may not be able to offer Prime shipping, you most certainly can offer expedited options with discounts such as those you can get instantly with services like Flat Rate Select, a discount USPS shipping option that’s built-into ReadyShipper X shipping software. Adding a free shipping threshold also puts you in contention with Amazon, and will ultimately earn you more business in the long run.

5. Multiple Product Images

Consumers are unable to see, feel or touch objects that they want to shop for and buy online. Amazon is aware of this and accommodates for it by offering multiple high-resolution images with zoom-in and 360-degree viewing options. Most of the listings also offer product videos, which can increase conversions by 16% or more.

Doing so is a catalyst for getting more online sales. Time spent on gathering the proper images is always rewarded with improved conversions, period, and is one of the key steps in writing better product descriptions for your online store that improve your average conversion rate.

6. Multiple Payment Options

Here’s the best way to look at limiting payment options for your customers. If you make it difficult for the customer to pay, you are basically telling them that you are not interested in their money. Consumers have plenty of options as to where they can shop online these days. Assuring customers that you accept their preferred payment method gets you one step closer to closing the sale.

Amazon accepts all of them, and your store should as well, making it easy for desktop and mobile shoppers (mobile generates about 40% of online payments and sales in today’s ecommerce world) to close the deal and buy the products they want from your online store.

7. Verified Customer Reviews

With 92% of shoppers relying on verified product reviews to make a more confident purchasing decision, it’s a no-brainer to add this key feature to the product pages of your online store.

A veritable service to consider in this regard is YotPo, which can help you integrate verified customer reviews to your site and to your social channels. It’s an excellent way to facilitate improved sales and create a steady stream of unique, user-generated content while following Amazon’s proven model to success.

8. Innovation Wins the Day

Amazon has consistently outdone its competitors by outpacing them with innovation. From curious concepts like Amazon Prime Air, which has yet to fully take off, to the more than 100,000 robot workers the ecommerce giant uses to power its warehouses, enabling it to effortlessly pick and pick millions of items and ship them nationwide every hour on the hour with precision and accuracy.

No wonder an eMarketer report from late last year finds that Amazon hauled in half of all ecommerce sales in 2018, generating more than $258 billion, representing a healthy year-over-year growth rate of 29.2%. What’s more, marketplace sales topped out at about 68% while direct sales came in strong at 32%, helping Amazon set new records in 2018.

9. Hassle-Free Returns

There are only a few online stores that can compare their policy to the returns policy that’s offered by Amazon. Sending a product back to Amazon is about as easy as it gets. The automated online system lets you easily process your return and generate your return shipping label in minutes.

Recent studies have found that easy returns are desired by 80% of consumers, or they won’t buy from you in the future. Now you can offer Amazon-like returns using software solutions like ReadyReturns, which plugs right into your store, enabling you to offer “Prime-like” returns for your valued customers that brings ease and automation to returning any purchase.

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Following in the Footsteps of Zappos

As you can see, Amazon nails it from top-to-bottom. One of the surest methods that they use to convince and convert is with their returns policy, though. That’s because Amazon knows that returns are going to happen no matter what.

Furthermore, they also know that buyers who make the most returns also make the most purchases, too. If you are wondering how a convenient product returns system like this can help your store improve profits and customer loyalty and retention, take a look at this infographic for more insight.


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