What Can Small Business Owners Learn From Amazon?

Small businesses’ concerns aside, Amazon’s business principles — a focus on customer service, relationship building and use of data — are great examples for small companies to follow.

A small business owner stands at the counter of a café, looking thoughtful.
(Image credit: Getty Images)

Is Amazon a menace to small business? It depends on who you ask. A report from the House Judiciary Committee (opens in new tab) accused the company of unfairly "disadvantag[ing] competitors" and holding a "monopoly power over many small- and medium-sized businesses" — claims the company has sought vigorously to refute.

But regardless of small businesses' monopolistic concerns, there's one huge benefit that Amazon offers to everyone: a powerful example. From its 1994 founding in a garage to its current $1 trillion-plus market cap, Amazon has clung to several business principles that all small businesses should imitate.

1. Thematic Unification Around the Customer.

Amazon has more than a million employees and dozens of subsidiaries across many verticals — but a simple and clear mission that hinges on the customer. According to the company (opens in new tab), “Amazon strives to be Earth's most customer-centric company, Earth's best employer, and Earth's safest place to work." Unparalleled customer-centricity (and Web retail dominance) were part of Jeff Bezos' vision for the company long before anyone might have thought it realistic, but the lesson for small businesses is not to be overly aspirational: It's to be clear about your overriding focus and to stick to it.

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As Amazon grew, having a clear thematic focus and relentless customer-centric attitude allowed disparate teams across the globe and across business lines to remain aligned and supportive of one another. Small businesses, even more so than Amazon, cannot afford to have resources be at cross purposes with one another. Thematic unity provides a framework for all players in a business to make the right decisions for the company in the long term.

Businesses of all sizes necessarily spend plenty of time thinking about proximate goals and tactics. But every business must also have a clear overarching mission. And, like Amazon, every small business should put the customer at the center of that mission.

2. Diligent Building of Relationships.

A certain aspect of our current economy is often referred to as a "subscription economy." Recurring monthly payments — your razor blade refills, streaming services and automatic dog food deliveries — actually constitute pieces of the relationship economy (opens in new tab).

In this way, Amazon's customer-centricity goes beyond merely offering a superior service at any given point in time. The company thrives by paying careful attention to the full customer journey and by carefully fostering a wide-ranging relationship with each of its customers. The result, in Amazon's case, is that the company seems to know what you want even before you do.

The strength of Amazon's customer relationships may seem impossible for small businesses to match. But in imitating Amazon's commitment to tailoring a full customer journey and relationship, small businesses will find that they have valuable assets that Amazon cannot match: a true community presence and an immense amount of goodwill that stems from the alignment of local interests and the power of real person-to-person relationships.

With the deployment of simple tech tools, small businesses can build out nurture sequences that help build stronger customer relationships than Amazon could within its vertical.

3. Relentless Unification and Activation of Data.

Data is the great enabler of much of Amazon's success. The company not only collects immense amounts of data, but also organizes it effectively and applies it across vastly disparate business lines. This allows it to routinely take data from any corner of the business, such as online retail, and put it to great use in a different corner of the business, such as a fulfillment center.

Small businesses may collect several orders of magnitude less data, but they still have more data than they can track in a spreadsheet and meaningfully deploy. Modular, no-code data platforms can help them cost-effectively organize and unify their data, while intelligent automation interfaces can seamlessly put that data to work across the business. Amazon would never leave the value of data on the table, and neither should a small business.

In the near future, true artificial intelligence will help close the gap between data-rich and data-poor companies by lessening dependence on huge data troves in the first place. When that happens, the small businesses that are well situated with organized, unified data will be best situated to succeed.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab).

John Winner is a six-time founder and the founder and CEO of Kizen (opens in new tab), the first no-code, enterprise-grade CRM and operations platform. Kizen enables businesses of all sizes to build and implement custom software, benefit from intelligent automation, receive real-time personalized insights, and unleash their full potential. For the past 20 years, John’s work has focused on the intersection of technology and humanity. In his free time, John mentors entrepreneurs at the University of Texas at Austin and thinks a lot about how to help humanity create more joy. John has written and contributed for publications including HR Daily Advisor, Employee Benefit News, and Sales and Marketing Management.