Executive Summary

With the sociological shift of consumer purchasing via the Internet many of today’s mom and pop retailers are feeling left behind. What are some best strategies for small businesses to expand their current reach and begin competing against online specialty shops?

Market Merchants Consulting performed a competitor analysis and strategy document for a small business specializing in telescope and binocular sales. Together these documents detailed how they could make significant gains against online competition like the Discovery Store and Binoculars.com, while keeping costs relatively low.

Highlights from the Competitor Analysis

The competitor analysis presented a clear view of the competition. Binoculars.com consistently held the lowest price while maintaining the largest selection. Discovery store had a limited selection and the highest cost but its name brand was strong enough too private label many of the products.

	Discoveryshop.com	Binoculars.com	Small Business Partner
Microscope - Meade 9460	$325.00	$279.30	$275.00
Telescope - Meade ETX-70AT	$299.00	$279.00	$299.00
Binocular - Meade Captureview 8x42	$199.95	$178.95	$199.00

In comparison our business partners product mix was larger then the Discovery store but smaller then Binoculars. Both had more content available for each product than our partner and each product page contained cross sell merchandise.

	Discoveryshop.com	Binoculars.com	Small Business Partner
Product Pricing	High	Low	Midrange
Product Selection	Limited	Extensive	Moderate
Product Content	Extensive	Extensive	Limited
Search Engine	Robust	Robust	Limited
Product Categorization	Clear	Clear	Confusing
Brand Identity	Strong	Moderate	Weak

Highlights from the Strategy Document

The strategy document revealed there was opportunity in the online retail arena for the small business. There was enough room in the marketplace provided they managed their E-commerce costs by partnering with a larger online retailer. Our suggestion was that they join Amazon's Third-Party Seller Program in order to increase brand awareness and improve sales. Additionally, we suggested they move their E-commerce solution to the Amazon platform for better technology, easier maintenance and cleaner processing.

There were some issues they would have to consider prior to moving forward with the decision. Amazon takes a percentage of each sale therefore decreasing their profit margin. They would be prohibited from follow up marketing to customers via e-mail and catalog distribution. However, since they shipped products direct from their retail location they would have the ability to insert marketing material at the time of shipment.

We believe the advantages outweigh the negatives as Amazon's broad customer base and shear volume of visitors per day has the potential to drastically increase their sales. This partnership will instantly improve their brand recognition and legitimacy in the marketplace. Additionally, Amazon's direct relationship with Google’s content feed allows for easy upload of product information to Google's shopping search engine again placing their product and brand name in front of millions per day.

Conclusion

Market Merchants Consulting believes there are significant opportunities for small businesses like this one to succeed in today's Internet based economy. These companies need to move quickly to incorporate online sales as part of their strategy. Partnering with a larger e-commerce retailer like Amazon will allow for improved brand awareness, and increased sales.

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