Small Businesses Can Succeed In The Online Marketplace: Here’s How
The following is an edited excerpt from the book, Escaping SEO and Amazon: Survival Guide for Small Businesses (The Online Transformation) by Jatin Patro.
My young daughter recently started her first business. She sells a custom homemade toy called slime, a viscous, colorful substance popular with kids. Her primary motivation is to help her favorite nonprofit, the Gorilla Foundation, through donations. A secondary goal is to prepare for college by earning $20,000 in five years through her entrepreneurial effort. It’s a good start for a young entrepreneur with charitable intentions, and I helped her with her business registration and built her a basic website to sell her product online.
The result was Sunstreak Slimes, a company based in Oregon.
She formally launched her products during a holiday bazaar at her school. We were pleasantly surprised to find hers was the most popular of all vendor spots at the market, and as a bonus, an attendee asked her to cover a birthday party.
Success at the bazaar validated her business model and the demand for her products, and made her enthusiastic about taking it online. I managed to place one of her products, Avalanche Slime, on the first page of Google’s search results, gave her a crash course on online success, and left her to take it from there. It was an opportunity for her to experience, firsthand, the real-world challenges of running a business.
Days, weeks, and months passed. Her site wasn’t updated regularly, her ranking for Avalanche Slime slipped, and her impact was as good as nonexistent. “I love making slime but not writing about it,” she explained.
Schoolwork has to consume most of any child’s waking hours, and beyond that is a constant tug-of-war between family time and personal time — and no time for “boring” content updates, especially to a website that already has enough content to guide the visitor in making a purchase.
If my daughter sells exclusively at local markets, she has a real chance of making her five-year goal. Farmers’ markets, downtown markets, and local markets in general are steadily growing in number because they embrace the time-tested values of localism in a true community sense. There’s a sense of belonging in such markets, with interactive conversations and high levels of confidence in buying and selling.
On the other hand, if my daughter confines herself to selling at local markets, there won’t be time for schoolwork, family activities, or any of the other components to a balanced childhood. That’s simply not acceptable. So there’s little choice but to take her business online, and the online representation of her as a vendor is her website. That doesn’t mean that she won’t still be targeting local markets; she just needs to do it in a way that’s efficient.
The problem is that the internet doesn’t define local markets very clearly. The default position for online search isn’t local, but global. In order to target a local market online, vendors have to compete globally.
The practice of SEO, or search engine optimization — the online process through which vendors connect potential buyers to their products by luring web crawlers to their sites — is a moving target that has become a prerequisite for every business wanting to succeed online. To my mind, SEO should actually stand for search engine overhead, and it’s an expensive overhead that’s neither practical nor effective for the majority of small businesses, which consequently turn to paid services and advertisements, and those advertisements generally end up further draining resources and adding to the small businessperson’s struggle.
It’s not just search engines that pose a threat to local online businesses; the threat is also from online marketplaces, especially Amazon. Half of all online retail shoppers today skip search engines altogether and go directly to Amazon, reducing retailers’ ability to benefit from search engine optimization by more than half. Sellers on Amazon’s platform are essentially helping Amazon itself grow in exchange for a new sales channel — one that doesn’t offer any promise of success.
The threat from Amazon has traditionally been to small retailers, but as the corporate giant increasingly expands into local markets, the threat will soon be to independent service providers, restaurants, farms — just about every industry.
Many retailers have tried to become part of the Amazon success story, looking to share the “pie” that is Amazon’s market share. My daughter tried opening a seller account with Amazon, but the process dictated by Amazon to list her few products involved far more overhead than she could commit to.
Amazon is clearly not a solution. It’s part of the problem.
Online marketplaces, especially Amazon, are what pose a threat to small and local businesses.
The Small Business Dilemma
My daughter isn’t alone.
Online technology, trends, and innovation have evolved in favor of globalism while neglecting localism. In the current online landscape, small businesses are left with no choice online but to scramble and embrace the overhead of competing in an unfavorable global landscape, irrespective of their desire and ability to serve local customers.
“Survival of the fittest” is only fair if the playing field is level — and the online playing field is far from level. Current trends increasingly favor the biggest online players. When Google takes shoppers and puts them on a path that inevitably starts with big brand names, Google becomes a threat to smaller businesses. In an online landscape where even traditional large companies are losing relevance, what chance do independent small and local businesses have? Just as Amazon isn’t the solution, neither is SEO. Instead of investing more and more time, money, and effort into SEO, the best solution is to escape it altogether.
If SEO becomes irrelevant, then the playing field levels off. That doesn’t mean the process will be easy: the internet accepts Google’s and Amazon’s terms as normative, and change means challenging the status quo.
“Survival of the fittest” is only fair if the playing field is level.
As I studied the challenges and threats faced by small businesses across various industries, it became obvious that online technologies and trends are drifting further and further away from the ideal solution.
In the quest to help businesses transcend traditional local boundaries, the importance of local commerce has been neglected. In the quest to be recognized as the best website or e-commerce platform, aesthetic appeal is being prioritized over sales and efficiency. In the quest to develop the biggest and greatest marketplace, the essence of independent business brand is being sacrificed. In the quest to serve the largest number of independent businesses, the community strengths are being sacrificed. Website and e-commerce platform providers are failing to empower small and local businesses to harness their unique independent and community strengths online.
The more I thought about these problems, the more perplexed I became. There seemed to be a great deal of interest in local commerce, but, by and large, it hadn’t gravitated toward — or translated to — the internet.
I decided to find out why.
The Buy-Local Dilemma
Thousands of communities across the United States and Canada are focused on helping businesses sell and purchase goods and services locally. Whether the goal is to promote and enhance the local economy, to provide ecological benefits, to promote local businesses, or to bring jobs to a community, there’s a great deal of interest in the “buy local” concept and in making it work for both urban and rural communities across the country.
I spent a significant amount of time going to conferences and talking with various groups and individuals, and in the process it became evident that while buying local is a laudable concept, putting that concept into practice was the problem. I encountered people everywhere who believed passionately in the local movement, but no one was answering the critical question: How do we make it easy to buy local?
In an age of intense internet commerce, there has to be an intersection created between local establishments and online retail opportunities; every business needs a significant online presence in order to thrive. Making it easy to buy locally means making it easy to access local goods and services, not just in person but also via the internet.
Almost everyone shops online, and when local businesses’ products and services aren’t readily available online, those businesses lose to national retailers — retailers whose products are generally just one convenient click away. The buy-local concept is there; it’s the tools to do it online that are lacking.
Local Marketplaces Online
Amazon can be understood as a dual community: a community of sellers combined with a community of purchasers. The solution to integrating the buy-local concept with the ease and reach of an online retail marketplace, therefore, is to create a community to sustain it.
The goal of such a community would be a thriving online marketplace addressing the buying and selling needs of a local community without additional overhead for businesses. The solution must do what Google and Amazon do for consumers while at the same time enabling new conveniences and efficiencies for businesses:
- Eliminate data duplication and maintenance overhead
- Accommodate all businesses — not just retailers
- Automate local orders, appointments, and logistics for each business
- Operate as an automatic and real-time extension of independent websites
This new breed of online marketplace will give shoppers additional convenience, not less; additional savings, not fewer; and additional reasons to “shop local” first.
The solution to integrating the buy-local concept with the ease and reach of an online retail marketplace, therefore, is to create a community to sustain it.
The first step to the solution is to make advanced website and e-commerce technology affordable and readily available. The second step is to bring independent websites together into community-centric search and shopping marketplaces. The third step is to provide new conveniences for buyers to search and transact with sellers in these online marketplaces.
Google’s search engine exercises powerful global reach. It does admittedly provide an option for local search, but not all consumers are aware they can restrict searches to a geographic area, and in any case, creating that restriction constitutes an extra step in the search process many consumers are unwilling to take. Local businesses are in essence competing with brands from all over the world — with local communities consistently losing those sales.
Imagine if we had the equivalent of the Google search engine for different communities — for example, an engine that returned results just for the city of Portland, or one that exclusively featured independent bakeries across the state of Oregon. A localized search engine would draw the search in and restrict it to a specified community.
A localized search engine would draw the search in and restrict it to a specified community.
The model for this kind of search and community presence already exists in the physical world. Shoppers passing through a local farmers’ market are exposed to every vendor’s table or booth. The vendor doesn’t need to make any extra effort to be found by potential customers. Consumers who frequent the farmers’ market are a self-selected group of people already interested in purchasing vendors’ goods. Every consumer won’t make a purchase from every vendor at the market, but every consumer will see every table or booth, and each vendor will have an equal opportunity to make a sale. The playing field is level at local markets. A local online marketplace would function in a similar manner: a self-selected group of consumers would search for purchases among visible and accessible local vendors.
Until very recently, e-commerce innovation has ignored the local aspect of online buying and selling and has focused instead on global — nonlocal — options.
The more I looked into the possibilities of local online marketplaces, the more I became convinced that this intersection of local purchasing and technology is the best way for small businesses to increase online relevance, compete more effectively with their biggest competitors, and effectively counter the current online threat.
My Background
I’ve been looking at the question of usability for a long time, so this new idea fit in with my background and skillset. I have one graduate degree in environmental engineering and another in computer science. I started my career as a software developer building new capability for FedEx’s website before moving to Intel, where I’ve been for fourteen years, leading various technology and IT efficiency initiatives.
Long before my daughter started her business, my wife and I had begun talking about the challenges experienced by single parents running part-time businesses from home. I gradually realized there was no online option to accommodate nontraditional businesses run by individual owners with only limited time to devote to running a business.
That was when I got intensely involved in the buy-local movement. I started attending and sponsoring related conferences and networking with small businesses from all over the United States, and I started to grasp the scope of the problem. The places that should have been exercising leadership in this arena — chambers of commerce — were losing members and weren’t retaining them, and businesses that should have been thriving were floundering.
The more I learned, the deeper I got involved. I’m now a certified business mentor and the chairman of the workshop committee at my local chapter of SCORE (resource partner of the Small Business Administration). I spend a good part of my time volunteering at SCORE and at various chambers of commerce as the in-house expert in online sales and marketing. Over the course of the past several years, I’ve gained a unique perspective into the threats and challenges faced by small businesses, and I’ve counseled scores of startups and businesses to help each navigate online technology and noise. I also teach several workshops on this topic.
The places that should have been exercising leadership in this arena — chambers of commerce — were losing members and weren’t retaining them, and businesses that should have been thriving were floundering.
The need for this kind of information and expertise is clear. What I’m teaching is how to use currently available tools to enable small businesses to compete, but it’s not a permanent, long-term solution. It’s helpful, but it’s not the answer.
My Solution
I wrote this book to offer a viable solution to all the problems encountered by small businesses attempting to survive — and even flourish — in the online ecosystem. I know they face a growing inability to compete both on search engines and against their biggest competitors, and I want to offer a prescription for improving their future. If you have a small business and are struggling with finding buyers for your products or services online, then this book is for you! Beyond business owners, this book also caters to the needs of business communities and webmasters, offering each a unique path toward increased value proposition.
I’ll start by helping you understand exactly what challenges small businesses are facing and what trends are working against them in the online ecosystem. And then I’ll introduce you to a platform that will adapt to your unique needs, enhancing your website’s potential and enabling you to obtain a decent market share for both goods and services.
That platform is called SharedMall®, and it does what WordPress, Shopify, Amazon, Google, and all other online platforms and applications can’t do: it provides access, efficiency, convenience, and a level online playing field for all businesses. SharedMall is already in place and working, helping businesses across a diverse range of industries to overcome hurdles and challenges.
In order to explain how SharedMall works, I’ll teach you how consumers encounter products and services and how they can choose yours out of what is available. Understanding how to identify and exploit this cycle will enable small and local businesses to improve the ways they are found, assessed, chosen, and transacted with online.
Finally, we’ll move into a vision underlining the importance of collective power and how it will enable small businesses to thrive and grow online by harnessing the collective power of multiple communities.
Intel founder Andy Grove has said that only the paranoid survive. That may be true, but it’s not paranoid to understand that the threat from Google’s SEO, Amazon’s dominance, and general technology trends is real and potentially fatal for small-business owners and entrepreneurs and must be addressed with a sense of urgency.
Let’s look at what is at stake and what we must do to thrive today and into the future.
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To keep reading, pick up your copy of Escaping SEO and Amazon: Survival Guide for Small Businesses (The Online Transformation) by Jatin Patro.
