How to compete with Amazon

As has been widely observed, the COVID-19 pandemic hugely accelerated the growth of e-commerce in 2020 and 2021. Experts have predicted that in 2023 global online retail revenues will exceed US$6 trillion and that e-commerce will account for over 20% of total retail sales.

Can you compete with Amazon?

While the majority of retail sales still occur in-person, e-commerce sales are growing at a far more rapid rate. For manufacturers, distributors, and retailers this is a warning light, with many still employing manual processes to compete for sales.

While it’s eminently possible for smaller players to compete with the likes of Amazon, it’s a suicide mission for small and mid-sized businesses to bring the knife of 20th-century paper-based processes to a 21st-century e-commerce gunfight.

Amazon is the e-commerce industry’s 800-pound gorilla. It’s estimated that in 2022, $4 in every $10 Americans spend online will go to Amazon. (A significant amount of the $6 that is still up for grabs will go to giant retailers such as Home Depot and Walmart.)

That’s the bad news. The good news is, if they invest a relatively small amount in the necessary technology, businesses that aren’t multinational behemoths can still lay claim to a substantial slice of the ever-growing e-commerce pie.    

How to compete with Amazon using rebate software and Microsoft Dynamics 365

Rebates are a good example of where companies can implement rebate software to help win the fight against the likes of big e-commerce retailers like Amazon.

Use trade agreements for flexible vendor rebates

Within rebate software, trade agreements represent the terms and conditions of a discount that is paid after the purchase of a product. These agreements provide a great deal of flexibility for vendor rebates and have the power of built-in accrual, tracking and reporting of earned rebates.

With access to the applicable rebates on offer, and potentially other add-ons and discounts, your sales team will be able to offer more competitive pricing as the order is being placed. For companies that set selling prices frequently at the time of order, this is a big advantage. It also has the added benefit of helping your sales team to understand and protect your true margins when trying to match a price for a customer. When placing the order, they’re able to apply rebates freely without it adversely affecting your margins.

Adopt customer-side rebates

Some rebate software solutions have customer-side rebates that may offer benefits for more progressive distributors, especially as the market changes. With the entry of the major online competitors such as Amazon, some customer side “offers” may become a better means of setting the sell price.

Customer rebates are often necessary for manufacturers, distributors, and retailers to earn a customer’s business. However, with manual processes and the sales team setting the sell price at the time of the order, companies will think they are selling close to purchase order cost but end up with net cost lower than the selling price. Rebate software offers the visibility manufacturers, distributors, and retailers need and the flexibility to control what type of rebates are offered and when. 

Connect it to your ERP in the cloud

For the above points to be truly effective in the battle against the big e-commerce retailers, manufacturers, distributors, and retailers need to be able to connect their rebate software with their Enterprise Resource Planning (ERP) system. It is a big advantage for businesses to be able to track the last sales invoice or quote price and cost all in one system. With the Microsoft Dynamics 365 ERP, there are rebate software providers that are able to integrate directly with the ERP. Companies will have instant access to the information they need without having to go in and out of different applications.

How Flintech can help you compete with Amazon

Flintech recommends Flintox’s rebate-management solution, which maximizes profits, minimizes wasted time, and provides a level of transparency that fosters trust with trading partners. Flintech staff can install this solution and, if required, help your business upgrade to Microsoft Dynamics 365 ERP.      

Final takeaway

In 1995, Bill Gates declared, “There will be two types of businesses in the next five years, those that are on the internet, and those that are out of business.” An updated version of that quote might state that there are now two types of businesses: those that are leveraging technology to maximize e-commerce sales and those that are headed for a Darwinian fate.

If you don’t want your business to end up in the latter category, you may want to book a free consultation with one of Flintech’s e-commerce-technology experts.