
How to Beat Amazon - joeyespo
http://www.collaborativefund.com/blog/how-to-beat-amazon/
======
andrenotgiant
I think people are starting to also notice cracks emerge in Amazon's
e-commerce quality as it scales, whether/when it becomes enough of a problem
to change shopper behavior is another question, but here are some examples
I've seen:

\- Blatant fake thumbdrives - this entire section is thumb drive scammers
using the hack that makes a drive appear larger in system info
[https://www.amazon.com/s/s/ref=sr_nr_p_n_size_browse-
bin_8?f...](https://www.amazon.com/s/s/ref=sr_nr_p_n_size_browse-
bin_8?fst=as%3Aoff&rh=n%3A172282%2Cn%3A541966%2Cn%3A1292110011%2Cn%3A3151491%2Ck%3Athumb+drive%2Cp_n_size_browse-
bin%3A10285020011&keywords=thumb+drive&ie=UTF8&qid=1513525301&rnid=1259751011)

\- $23 knock-off magsafes rife with fake reviews, that break/fry in days -
[https://www.amazon.com/s/ref=nb_sb_ss_i_1_7?url=search-
alias...](https://www.amazon.com/s/ref=nb_sb_ss_i_1_7?url=search-
alias%3Dcomputers&field-
keywords=magsafe+charger&sprefix=magsafe%2Caps%2C185&crid=J0KJGT8BMTT6&rh=n%3A541966%2Ck%3Amagsafe+charger)

\- The level of chaos in shopping categories effectively prevents you from
doing things like sorting by price or reviews.

In my experience, Amazon is always happy to refund on these things and chalk
it up as cost of scaling, but when does it start to become too much, similar
to what happened to ebay?

~~~
glup
Product quality issues of the above types leave me deeply skeptical that they
are ready to be a health care provider.

~~~
madeofpalk
Eh. Different Amazon verticals are ran very differently and have their own set
of problems.

I've used Amazon Fresh a few times and I've never received "fake salmon".

~~~
ceejayoz
Funny you should mention that...

[http://abcnews.go.com/US/fake-fish-experts-mislabeling-
seafo...](http://abcnews.go.com/US/fake-fish-experts-mislabeling-seafood-real-
problem/story?id=13706266)

> A new report released this week says recent studies have found that seafood
> may be mislabeled as often as 25 percent to 70 percent of the time.
> According to Food and Drug Administration port inspections, a third of
> seafood sold in the U.S. is mislabeled as one type when it's actually
> something else, even something cheaper.

~~~
madeofpalk
Here's hoping this fish problem doesnt exist overseas in the UK!

~~~
IncRnd
Yikes!

www.google.com/search?q=mislabeled+fish+uk

------
RcouF1uZ4gsC
Complicating beating Amazon is the fact that it is lead by the arguably the
best CEO in all of tech (and maybe in any company).

Whatever else may be said about Bezos, he has the ability to think long-term,
create new markets, and execute on his vision. He also has the trust of
investors who still buy Amazon stock even though he pretty much reinvests all
the profits. The combination of existing market dominance, excellent
leadership, and ready access to vast amounts of capital is a very hard
combination to beat.

~~~
jjeaff
>investors who still buy Amazon stock even though he pretty much reinvests all
the profits.

But you see, that's the way the game is played. Why siphon down cash and get
it double taxed to pay it out as dividends when investors can sell shares as
the price rises.

This avoids corporate tax and income tax on dividends. You are effectively
saving 40% or more by doing it this way.

Investors aren't holding out for the day there are finally profits. They are
riding their tax preferred profits all the way to the sky as we speak.

~~~
kspaans
Yes but... any other company could do that instead of paying dividends? What
makes AMZN so special?

~~~
jonknee
Amazon actually has uses for the money. Managers in most firms are so scared
of failure that their best idea is to buy back their own shares because it
makes the next quarter EPS easier to beat. Few companies are investing in
plant/equipment like Amazon.

------
deegles
Is it just me or is Amazon doing all of these things already?

Create an aspirational brand -> they have tons of in-house brands in many
categories, from premium to budget. They're just not usually advertised as
being owned by Amazon.

Build a community -> Lists, Vine, Reviews, their forums, probably a bunch of
other things

Personalize your products -> Amazon Merch

Deploy an omnichannel strategy -> Retail stores, Treasure Truck, Amazon Go,
Whole Foods, Prime Now, Flex, drones...

Go niche over mass -> Marketplace

Commit to values -> I think the last 20 years have shown that Amazon is pretty
committed to investing in growth...

~~~
tyingq
Great post, but I take exception on this part:

 _Commit to values - > I think the last 20 years have shown that Amazon is
pretty committed to investing in growth..._

In the article, "values" was alluding to something more altruistic or socially
aspirational than growth, capitalism, etc. Amazon's image is pretty weak in
this area. Especially around employee culture and truly putting the consumer
first.

------
ikeboy
I beat Amazon all the time on their own platform. That is, I sell the same
items they sell, but for cheaper. But this is merely a tactical localized
advantage.

If you want to build something that beats Amazon, you need to identify what
Amazon either won't or preferably can't do. Some plausible candidates:

1\. Consistent prices

2\. Customizable prices (ala jet)

3\. Products or categories Amazon can't source (surprisingly many, there are a
ton of popular items Amazon doesn't sell and a bit of sleuthing can find some
of them). One subcategory of this is exclusives of existing brands and
licenses, or patented products. Another, quite lucrative category is MLM stuff
- it's tough to get them in bulk but the popular ones sell quite well by third
parties on Amazon.

4\. Trends. A small business can typically react quicker to trends. Lots of
small sellers made money on fidget spinner well before big retailers did.

5\. Sell to b&m, still 90% of retail. The vast majority of Amazon PL is not in
stores.

Another thing would be to identify Amazon's profit centers and compete there.
They make a ton of money on some items, they lose a ton of money on others.
You can profitably compete with the high margin items.

------
toomanybeersies
One problem with Amazon is that it's terrible for discoverability. You can't
really effectively browse Amazon, because there are too many items, and their
categorisation is somewhat lacking due to the range of items they sell.

This is where niche websites really come into their element. JetPens comes to
mind as a very good example. They sell high end pens (fountain pens etc).
Their categorisation is spot on, since all they sell is pens, so I can browse
their range of pens and accessories easily. They also have a really good blog
and guides to help drive sales. Their price point is ideal for a blog-driven
marketing/sales model. After reading a blog article or a guide, I'd happily
shell out $25 to try something new, which is conveniently linked to from the
blog post.

~~~
dawhizkid
There are all these startups popping up that curate the best products on
Amazon, Aliexpress, etc.

[https://canopy.co/explore/popular](https://canopy.co/explore/popular)
[https://thieve.co/](https://thieve.co/)

Actually really interesting potential from a biz perspective - nice lifestyle
biz if you do it right. Depending on how many purchases you drive you can earn
between 4-8.5% of the purchase price.

~~~
JBlue42
Yeah, camelcamelcamel is the one that comes to mind for me.

Also, for Amazon Video, instantwatcher.com, but not sure how they monetize.
Way easier on a PC to navigate Amazon Video Prime and Netflix than on their
native sites. Amazon still leaves a lot to be desired though.

------
dawhizkid
I'm still kind of amazed by Dollar Shave Club ($1bil exit to Unilever) -
absolutely no product innovation (private label S. Korean razor you could've
bought on Amazon for cheaper) but brilliant branding/marketing.

Objectively Amazon has never had much of a personality brand-wise, and
anything you can do to exploit that weakness will help you win customers.

~~~
humbertomn
It amazes me too. But we have to remember that although there was no product
innovation, there was business model innovation for that niche market. Online
subscriptions for razors were not a thing.

------
scarface74
They left out one. If you have a quality brand and you're not trying to
compete on price and you have an upscale market, advertise on podcasts. I find
most podcast ads to be interesting, maybe not applicable to me directly at the
time but a product that would be on the top of my list if I were in the market
for that category of item, and a lot of my recommendations come from hearing
about products on podcasts.

Podcasters seem to be a lot more discerning about which products they will
advertise.

On the other side of the coin,since most ads for podcast include some type of
offer code, you can measure which podcasts are affective at driving sales.

------
Upvoter33
they forgot: out-execute under promise and over deliver be more agile be
willing to break things etc.

------
debt
I think the best way to beat amazon is just start a shipping company.

Creating an online shop is dead simple. Search is solved.

If only Prime existed as a SaaS service. Shyp seems to be attempting to do it.

~~~
jjeaff
Prime IS a saas service. It's called fulfillment by Amazon (FBA) and they will
warehouse and ship your products whether you sold them on your own site, eBay,
or Amazon marketplace.

------
bluetwo
If you don't know how to beat Amazon, read the Innovator's Dilemma.

Just don't buy it on Amazon.

------
mmahemoff
I thought, being on HN, this would be about offering a better PaaS product
than AWS, but I could have been equally wrong if I'd guessed any of 10+ other
industries too (How to beat Amazon at food delivery? Ticket sales? Music
distribution? ...)

------
icodemuch
tldr: the only chance you've got to beat Amazon when building a consumer brand
is selling a premium product to a specific niche

------
mabbo
> it’s certainly not known for its values.

Oh, this I disagree with. (Bias note, I work for Amazon but state only my own
opinions).

Amazon has the Leadership Principles. Google them to see what they are. You
may not agree with them, but these values are religion inside the company.
It's becoming less so lately (to the detriment of the company, in my view) but
they're still values that Amazon is and should be known for their obsession
with.

~~~
rorykoehler
I would wager you've been downvoted because no one believes these purported
values to be Amazons true values.I had a brief prescreening call with someone
at Amazon when i flirted with the idea of applying to work there. They ended
the call by pointing me to these values. My first thought while reading them
was that they are terribly dishonest. Really turned me off applying there.

------
olfactory
These are good suggestions for anyone starting an online retailer.

But when it comes to overall innovation I'd argue that Amazon is significantly
out-innovating Facebook, Apple, and Google, each of which seem afraid to take
any big risks or make any obvious long-term bets.

I think markets will catch up with this reality at some point. I reorganized
my tech stock portfolio to reflect this view yesterday.

------
richmarr
This article is talking at the wrong level about Amazon. They're not an
ecommerce company anymore. They're an infrastructure provider that
cannibalises its ecosystem _just_ slowly enough that nobody panics.

Start a business, run it on AWS, do well, they have all your systems metadata
and using that can replicate your business. Rinse, repeat. Then there's Lambda
and Greengrass... ha

We're the Eloi, AWS are the Morlocks.

You can't beat the Morlocks with a 'community' play, and the only way 'going
niche' will help you is that you'll be too small to pay attention to.

[Edit]

To make my comment less negative...

To beat Amazon you need to get ahead of them on a game they don't already own
(or have the capacity to catch up on) and establish yourself as the dominant
market in that space. E.g. there's an interesting company in London calle
Synthace for example who are building a compiler for pharmacueticals. You
write code that defines a manufacturing process and it makes the drugs for
you. If they can provide commoditised pharma-as-a-service and evolve a healthy
enough ecosystem to build up some value, Amazon will find it hard to replicate
and either try to acquire or hunt elsewhere.

Yeah it's a bleak view. It's not going to change either because China's
ascendance will mean Amazon is the US's strongest buffer against Alibaba, so
unlikely to get broken up even it achieves monopoly position.

~~~
yeukhon
> they have all your systems metadata

My first thought is this is a very big claim. It sounds like they are
“stealing”. They ask what customers want and then build new services based on
customers’ reqursts and what could win more customers. Sure they know what
their customers do when the customers interact with an account mamager, but we
can say the same about every business out there then.

Also, AWS is only part of what makes Amazon profitable. Amazon is interested
in making itself indispensable, by connecting dots, from online shopping to
healthcare to home automation.

------
adamio
It's hard to beat Amazon on diversification, specialization would be the only
way. Until they acquire you

------
mirimir
At some point, doesn't antitrust intervention trigger? Especially once a firm
bootstraps across multiple markets? Or is Amazon's market power too small?

------
misterbowfinger
I wonder if Amazon would be open to reselling access to their distribution
centers, a la cellular networks. I feel like the upside to them would be
enormous.

------
sjtgraham
“How to not compete with Amazon”

------
getcrunk
This is a dumb article

------
godzillabrennus
Amazon succeeds by being data driven.

[http://ShopIn.com](http://ShopIn.com) is working to move buyer personas out
of data silos by decentralize purchasing history onto a federated blockchain.

Decentralizing purchasing data should let individual brands compete more
equally.

It's an ambitious project but should it take off it will provide real world
data to make smaller brands more competitive.

~~~
yeukhon
I am not really sure how this is decentralized. Users still depend on your
service to be operational in order, no? Then that is not decentralized. Is it
the data really decentralizrd then? The infrastructure piece doesn’t seem to
be, which makes decentralization existence questionable since, unless the data
can be used else where, the data itself is useless.

Also when you say data is completely owned by thr user, how are you able to
recommend? How do you help your engine to improved? In the end you do need the
data. Spotify trains their customer dataset annoymously, which most companies
do when they are doing training. So I don’t how this project is any more
putting user in control. It’s very vague to me - are you suggesting privacy is
honored? That’s what “user is in control” means - I can either share or not
share, but what value do you get then?

