I will happily speak on first experience via competition with Amazon via e-commerce. Amazon does two things really well, delivers a product to you very fast and makes it beyond easy to return (within 30 days). I am only speaking to amazon selling its own goods, not 3rd party sellers.

As a retailer, Amazon is merely a competitor in the space. If your business model is the exact same as Amazon’s; i.e., you do not provide any extra value to your customers besides shipping and returns – its a game you are going to lose at. Funding is key here, and they have more than you do.

However, the differentiator is service in product knowledge. Being the everything of products gives Amazon a weakness. They don’t specialize in products. The only way you can judge if products are good or bad is mob mentality or “star rating” by quantity and overall rating. Its a good scale, but may not give you what you need tailored to you.

So if you want to compete, offer something unique: service in the product. Know your products, which in turn helps you know your customer. You will build loyalty and word of mouth. If you can ship and return as fast as Amazon does, you have got a triple threat success tactic while they have a double.

Best of luck out there retailers.