Help! Online Businesses Are Killing Mine!

Ways Small Businesses Can Compete With Online Businesses

Are online businesses seriously cutting into your profits?. Image (c) Johnnie Davis / Getty Images

Is your bricks-and-mortar small business suffering because of competition from online businesses?

Krista B., for instance, who owns a children's clothing consignment store located on the main street of her town, says she is getting killed by Facebook shopping.

"Everyone has their own Facebook store and many advertise for others to bring their clothing to them to be consigned. So as business is booming for them I, who have to pay overhead and collect and remit taxes, am seeing a steady decline."

It doesn't matter whether they’re running a Facebook or eBay storefront or using sites like Etsy to get their merchandise in front of the public; online businesses just don’t have the same overhead that bricks-and-mortar retail businesses face.

And when you combine that with the convenience of online shopping and the increasing tendency of people to use their phones to comparison shop, you're lucky if your small business doesn't get left out of the shopping equation entirely.

How Can Your Small Business Compete With Online Businesses?

1) Fight fire with fire and reach out to your customers and potential customers online. There are two parts to this marketing strategy:

A) Just because your small business has a physical storefront doesn't mean you can't also sell your products or services online. Don't want to go to the trouble and expense of setting up a complete separate ecommerce website? Don't.

There are lots of simpler ecommerce options, like the afore-mentioned Facebook or eBay storefronts you can use.

(Learn more about selling on eBay.)

Or use websites such as eBay or Etsy to sell individual or small lots of items. And/or advertise and post items for sale locally using Craig's List and Kiiji.

B) Develop a social media plan and create a social media presence.

The whole key is to connect with your small business's potential customers online. Just having some sort of online storefront promoting your products or services isn’t going to do that. A judicious social media plan, properly executed, can. Follow the link above to learn exactly how your small business can do this.

3) If you haven't, make sure you're collecting your customer's email addresses in-store and send them a newsletter weekly with specials, related news, featured items new to the store etc.

Email is still the most common way that people interact with one another online so why not make sure that you're taking full advantage of it? There are a great many email marketing applications that will make producing and sending a newsletter to your customers simple, including Constant Contact, iContact and Vertical Response. Or you might try something like Feedblitz, which will turn your blog into a newsletter and send it out to your customers and/or clients.

There are two rules to follow when sending out email newsletters to keep your customers happy:

1) Always use an opt-in system for building your list.

2) Don't deluge them.

Sending out regular updates is important to build community and keep your customers in the loop but that doesn’t mean you have to send them an email newsletter every day.

4) Give people extra reasons to come to your store rather than shopping online. If your small business is selling stuff on Main Street and their small business is selling stuff online and you're selling the same stuff, then why would the customers bother to get into their vehicles and make the drive to your store? It's so much easier to just click a mouse.

And don’t say "because my stuff is cheaper" because that's not enough of an answer for a lot of people who are willing to pay x amount for convenience.

Give them other better reasons to shop at your small business such as the fact that you donate part of the proceeds on every purchase to charity, instant entry into a prize draw, long-standing support of a local cause, a cool event, a customer loyalty card – something to make them feel the trip is worth it.

5) And lastly, to compete with those online businesses that are cutting in to your bottom line, make sure you're the locally connected small business of choice. Join groups where your customers are hanging out. Volunteer if you can. PAK Your Business Image everywhere you go.

And don't forget to join local business organizations. The referrals you hear about are always just the tip of the iceberg.

Sure, it may be that no one in your local Rotary group is going to personally bring in their children's clothes for consignment. But they know all kinds of people you don't and one of them may know someone who has some clothes they want to consign and mentions what "a good egg" you are – bringing you another customer.

It happens every day – once people get to know and value you.

Your Small Business Can Compete

Competing with businesses that are strictly online operations when you're not is not easy. The playing field is not level: as a bricks-and-mortar small business, you will always have expenses that they don’t. It will take a consistent effort over time if your small business is going to retain and grow your market share. But it is possible if you can beat those online businesses at their own game and become the destination of choice.