Model After The Strategies Used By Amazon To Get Traction Over Your Own Store

Some of the key strategies to take advantage of Amazon’s platform are about understanding customers’ needs, using testimonials and reviews, improve product variety while offering competitive pricing. While price and variety matters, it also matters to differentiate your offering compared to existing players. 

The strength of the Amazon ecosystem

Amazon has a diversified business model. Amazon’s primary revenue streams comprise its e-commerce platform, made of Amazon labeled products and Amazon third-party stores. In addition to that, Amazon makes money via third-party seller services (like fulfilled by Amazon), advertising on its platform, AWS cloud platform, and Prime membership.

Whether you love, hate, or feel indifferent towards Amazon, you cannot deny the sheer scale of its success. At this stage, it likely accounts for a good chunk of the US e-commerce sales, and for many people it’s the default e-commerce destination.

And when you see a business dominate like that, you must learn from its methods. You don’t win points for originality, and it isn’t the ideas that matter anyway— it’s the execution.

Let’s take a look at how Amazon is leading the pack, and identify some takeaways that you can use to get your own store moving in the right direction.

Focus On Meeting Customer Needs

Customer obsession goes beyond quantitative and qualitative data about customers, and it moves around customers’ feedback to gather valuable insights. Those insights start by the entrepreneur’s wandering process, driven by hunch, gut, intuition, curiosity, and a builder mindset. The product discovery moves around a building, reworking, experimenting, and iterating loop.

Amazon is phenomenal at giving customers what they want. It collates information from its massive pool of users, analyzes the data, and comes up with simple solutions that seem obvious in hindsight but could easily have been missed. Before they essentially forced the entire e-commerce industry to provide free shipping, was it viewed as a prospective game-changer?

And did anyone else understand, as they do, that users will gladly accept recommendations? We like to know what combinations of items others are buying because it takes some of the work away from us. When you don’t feel like rummaging around the web for in-depth guides, a simple “Item X works well with Item Y” is incredibly convenient.

brought-together-amazonBundles like this are powerful sales tools.

This system is a win-win of monumental magnitude. The user saves time and easily gets a bundle they know will function, and Amazon makes a huge sale in one fell swoop. Now, your store won’t have the resources and sophisticated infrastructure that Amazon wields, so you probably won’t be doing anything too complex— but you can absolutely optimize it to give people what they want.

You can provide manual recommendations of good combinations, and generally put yourself in their shoes to consider what elements of your store might discourage them from buying. How can you best give them what they want while also getting what you want?

If you get everything polished to a shine, plenty of your customers won’t even think twice before buying. That’s the kind of value proposition you’re aiming for.

Use Testimonials to Full Effect

Amazon SEO represents the set of marketing tactics that sellers on Amazon can employ to better rank their products’ pages organically (without paying for placement), thus building a continuous stream of customers on the store. In short, Amazon SEO leverages Amazon search capability to rank e-commerce pages and make more sales.

Amazon is packed with reviews. Some are short, some are long, and some are incredibly detailed with photos and illustrations, but the main thing is that the numbers are there and the prominence is absolute. And though it barely needs confirming (they wouldn’t put so much time into something that had no impact on revenue), the stats confirm that testimonials are hugely important for making sales.

So it isn’t enough to simply throw in the occasional review through manual uploading. Ideally, you need a full system for automating and presenting them as effectively as possible.

If your website is fully bespoke, you can embed a solution like Trustpilot. If you built it through one of the main online store builders, you should be able to find a free (or very cheap) review app or plugin to handle most of the work for you.

Here are just some of the free review apps you can get for a Shopify store, for instance:


Whatever route you take, you should ensure that every product has a good array of reviews that make sense and cover the basics. And whatever you do, don’t hide all the negative ones— it harms far more than it helps. People want to read believable comments, not filtered praise.

Expand Your Revenue Stream

Revenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them.

The Amazon Marketplace was a masterstroke, and it has given Amazon the kind of leverage that feels insurmountable. The idea was simple enough: build a strong retail platform with plenty of traffic, then tempt other retailers to share it instead of just trying to compete with it. They get more exposure, and Amazon gets a vast ecosystem that allows customers to buy pretty much anything they need from one e-commerce site.

Just think about how they get the best of both worlds. eBay, their chief rival as far as the scope goes, sells only third-party items. Most retailers sell only their own items. Amazon does it all. And there’s no reason at all why you can’t expand what you offer on your site too.

Think about your local community; all the small, niche retailers, and the entrepreneurs with quality products but ad-hoc distribution systems. You can give them a larger platform and provide value to your customers at the same time, making your store more appealing.


How Amazon draws sellers in.

If you’re e-commerce only, you can engage in some affiliate marketing, endorsing specific products that you don’t sell but know will be useful for your customers. If you set up your site through a store builder (as we previously touched upon), you’ll likely have the option of using an app or a plugin to add to your inventory through dropshipping. This is a hands-off practice that allows you to sell an item but plays no part in fulfilling the order once it has been placed.

If you have a retail location, though, you have even more options. You can find great local products and strike a deal to sell them at the checkout, rent out a corner to an aspiring magician, or charge a fee to play a band’s music in your building. And as long as you do it tastefully, and strive to be selective about the partnerships you form, your customers will appreciate the added variety.

A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

Be Willing to Adapt

One of the reasons Amazon has become so staggeringly effective is that it is entirely willing to let its creative team innovate and back them against mountains of precedent if necessary. In many cases, businesses get stuck in ruts where they just want to carry on with tactics that have worked before and fear that any change will be counterproductive. Not so with Amazon.

The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

That’s how they’ve been able to move from retail to books, e-readers, operating systems, tablets, phones, drone deliveries, and now grocery stores. They’re willing to give new things a shot.


Source: https://www.flickr.com/photos/atalaya/34622320425

And yes, their astronomical piles of money allow them to do that but consider that as recently as 2013 they were widely questioned for not being all that profitable. The truth? They were taking that profit and investing it in the future— and now it’s paying off hugely.

So how can you apply this lesson to your store? It’s simple, though not easy: be creative, be fearless, believe in your ideas, handle your cash flow efficiently, and be ready to turn your business on a dime if the right opportunity comes along. The slower you are to take advantage of opportunities, the less you’ll get out of them.

Amazon is on top of the e-commerce world for a lot of really good reasons, so why not learn from the best? Model your retail approach on theirs, and you’ll be able to take advantage of the disruptions they’ve brought to the industry.

Read next: How Amazon Makes Money

Other resources for your business:

Other business models:

Connected to Amazon Business Model

Amazon Business Model

Amazon has a diversified business model. In 2021 Amazon posted over $469 billion in revenues and over $33 billion in net profits. Online stores contributed to over 47% of Amazon revenues, Third-party Seller Services,  Amazon AWS, Subscription Services, Advertising revenues, and Physical Stores.

Amazon Mission Statement

amazon-vision-statement-mission-statement (1)
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Customer Obsession

In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!

Amazon Revenues

Amazon has a business model with many moving parts. With the e-commerce platform which generated over $222 billion in 2021, followed by third-party stores services which generated over $103 billion, Amazon AWS, which generated over $62 billion, Amazon advertising which generated over $31 billion and Amazon Prime which also generated over $31 billion, and physical stores which generated over $17 billion.

Amazon Cash Conversion


Working Backwards

The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

Amazon Flywheel

The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

Jeff Bezos Day One

In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

About The Author

Leave a Reply

Scroll to Top