As an e-commerce writer, I often find myself pondering over the larger issues and trends in e-commerce. Often this thought process leads me to wonder about competitive advantage in the e-commerce industry. What could lead some players to develop a long-term competitive advantage?
How can the better-managed e-commerce businesses stand apart? What are some of the key differentiators of winners? These questions are not easy to answer. No one can hand you the Holy Grail to e-commerce success, but selling unique products could provide you with substantial differentiation. Maybe enough to sustain long-term competitive advantage.
Selling Unique Products to Set Yourself Apart
What could be a better differentiator than selling products that no one else is selling? Of course, your unique product should be the kind that people want to buy, i.e., your products should be good-unique, not bad-unique. The product could be unique because of several reasons:
- You may personally handcraft products. When the time comes to scale up the business, you would have to find a way to get the same product handcrafted by others.
- You may manufacture the product though it may not necessarily be handcrafted.
- You may source products that are difficult to source. These would not be unique but could be difficult to source.
Examples of Difficult to Source Products
Some examples of e-commerce businesses sourcing difficult to find products are:
- A Specialty E-Commerce Website: A specialty e-commerce website that sources handcrafted products from remote villages in a third-world country might not be everyone's cup of tea, but there are immigrants in all countries. What if some of them start sourcing, and effectively marketing, native products in western nations. That could be an example of selling unique products.
- A Niche E-Commerce Store: An outrageous example of a niche e-commerce store that only sells good purchased from select places of historical interest. For example, some entrepreneurs started selling portions of rubble from the Berlin Wall after it was demolished. The proposition was that you could literally "own a piece of history." Some of these could be antiques, and others could be collectibles. The idea is simple: find seemingly ordinary goods that have historical significance.
- An E-Commerce Business That Has an Exclusive Licensing Arrangement: Few things have been marketed as effectively as religion. People's religious beliefs can lead them to become price inelastic to the point of irrationality. And that can be a marketer's delight. If you can get into an exclusive licensing arrangement with a popular religious destination, you can create a whole lot of merchandise around it. This could be the usual apparel, cap, or souvenir. Or you could be braver, and try to sell embossed gold coins and other expensive branded goods.
What Prevents E-Commerce Businesses From Selling Unique Products
There are several deterrents to selling unique products:
- The largest retail markets are for mass-produced branded and generic goods. If one starts focusing on unique products, one can at best be a strong niche player.
- Many e-commerce businesses view themselves as retail businesses. They do not want to get into the rigmarole of manufacturing or sourcing unique goods.
- Maybe you can manage to unearth a strong business opportunity by selling unique goods, but could you sustain the uniqueness of your offering? How tough would it be for competitors to catch up and sell identical or similar products? And I am not even talking about counterfeit rip-offs here.