Local business owners have been hit with both horrible and wonderful news lately—all at once. First, we’ve heard a lot about the Retail Apocalypse which is causing a rash of retail store closings all over the country. The trend has local businesses shuttering their doors at rates that even surpass the Great Recession.
But at the same time, we’re hearing that just last month retail sales improved. In fact, the numbers were better than they were only a year ago.
So what do the confusing numbers mean, and how in the world is Amazon involved in the fate of your local business? Let’s talk about 4 biggest reasons why you should fear Amazon as a local business owner, and what steps you need to take right now to curb any negative effects the giant corporation can have on your business.
Many Consumers Like the Convenience
In a world defined by “hurry, hurry, hurry,” people are looking for just about anything that will save them some time. And one of the biggest time wasters is trying to find US local businesses on the large search engines. The problem arises when someone wants to find a local business and they type in the type of business and their city or town name. Typically, instead of local businesses showing up in the search results, they’ll often see websites belonging to big box stores or online national chains, articles written about the topic, or anything other thing that is even remotely related to the search term. People are in a hurry to find US local businesses don’t want to have to dig through a bunch of irrelevant results to find the local businesses they want.
And so they turn to sites like Amazon. All they have to do is click on the site and a mere few days later, they can arrange to have the products they want delivered to their doorstep. This ease of purchasing is harming local business owners across the nation, and is the basis for many of the store closings.
The Solution: Do all you can to make buying from you as easy as you can for your customers. For example, do you offer deliveries? Some local shops and restaurants do, and it dramatically increases their sales. You could also think about running a tab for your most loyal customers if it makes financial sense, or take orders over the phone and carry the bags to their car curbside when they arrive. And the best thing is that all of these ideas can only be done by local business owners—online stores like Amazon won’t be able to compete with it.
Some Amazon Customers Don’t Pay Sales Tax
Did you know that some people can make purchases on Amazon without paying sales tax? It’s true. Even though Amazon has agreed to collect sales tax from its customers in most states, there are a lot of individual sellers on the site who can choose not to collect the tax. The law says that if a seller has nexus in a state, which means some type of physical or financial presence, they are supposed to collect sales, but there are many of them flying under the radar. And so when consumers make purchases from those seller, they pay less money for the products because they’re not paying sales tax. But local business owners don’t have that option. When they make a sale of a taxable item, they are required to collect the associated sales tax. That means consumers will at times pay less for items they purchase on Amazon. Even President Trump is adding to the conversation as he recently tweeted out that Amazon hurts local retailers because of the tax policies.
The Solution: Many states are getting tougher on sales tax when it comes to online shopping because they’re losing so much revenue. Customers are supposed to pay use tax to their state when a seller doesn’t charge them sales tax, and we’re beginning to hear more and more about it. As a local business owner, you can inform your customers of their obligation to pay use tax when they make sales tax free purchases online, and they realize that they’re not really saving that much after all. In addition, most online purchases involve shipping costs of some sort, which they won’t get when they make their purchases from you. A little customer education on the differences in total cost will go a long was in helping them understand why it’s better to buy local.
People Can Get Products Overnight Without Leaving Their Homes
Let’s face it, people like to do things the easy way these days, and if they can order a product online and then have it shipped directly to their home in a couple of days, many of them will forego the local store and do it. And this trend has extended to things beyond just books and clothes. Amazon now offers just about every imaginable product you can think of, including groceries. For example, if someone were planning a meal and realized that they didn’t enough flour to make it, they can log onto Amazon and have it arrive at their doorstep the next day—or the same day in some of the larger cities. How are you supposed to compete with that?
The Solution: So how do you compete with an online store that makes things so very convenient for people? You add something to your offering that online stores like Amazon can’t match. For example, you could offer every customer an ice cream cone one day, or give away a prize for the best comment left on your local business listing at Find US Local. In other words, make it exciting for people to come to your store and make sure they understand that you offer things that they can’t get from Amazon.
Amazon Carries Something for Everyone
There are millions of products on Amazon and it’s almost impossible to log onto the website and not find what you’re looking for. That’s why consumers love it so much—it is a one-stop shop where they can find everything they need in one place. A person could log onto the site and do some grocery shopping, buy a new outfit, a new toy for their child, a couple of books—some which could be delivered instantly to a Kindle—wax for the car they were going to wax that weekend, some sports equipment for their teen—oh, and if they wanted to watch a movie, they could do that instantly, too. Whew, how in the world is a local business owner supposed to keep up with that?
The Solution: Keep in mind that being a one stop shop is not your role in the community. Instead, your goal should be to cater to the needs of the local people who shop at your store and provide them with products they can’t get at an impersonal store like Amazon. For example, if you own a dress shop, you could keep in stock the styles and colors the people in your area wear. And if you own a local bookstore, schedule book signing by authors for your customers to attend—they definitely can’t find that at Amazon. Be sure to make note of your specialty in your local business listing on the local business directories your site appears on. In fact, you should include as much information on local directories as you can because that’s where today’s consumers will go to find you.
The Bottom Line
I know this sounds like the worst nightmare for a lot of local business owners, but here’s the truth: your local store is never going to successfully compete with Amazon. Instead, you need to carve out your special niche in your community and make yourself invaluable to the people there.
And don’t forget to remind your customers that by shopping at your business, they’re helping create jobs in the local community. That’s definitely something Amazon can’t claim. After all, when people in your town or city try to find US local jobs, they don’t look to Amazon for it, do they?
And while you’re at it, don’t forget to create a business listing on local business directories like FindUsLocal.com. Local directories are the way people find US local businesses now, and if your shop or eatery can’t be found on one, chances are you’ll miss out on a lot of business. Why not take the time and create your local business listing right now?