Is Amazon a menace to small businesses? It depends on who you ask. A report from the House Judiciary Committee 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, “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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.
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.
-
Visa Is the Worst Dow Stock Wednesday. Here's WhyVisa stock is down sharply Wednesday after the credit card company came up short of revenue expectations for its fiscal Q3.
-
Another Analyst Moves to the Sidelines on Tesla Stock After EarningsTesla stock is spiraling Wednesday after the EV maker's big earnings miss and Wall Street has been quick to weigh in. Here's what you need to know.
-
Confused by Annuities? Making Sense of the Different TypesMany investors aren't sure if annuities are a good option for meeting financial goals. Let's look at the different categories, along with their pros and cons.
-
Talkin' 'Bout My Generational Wealth: Baby BoomersWith retirement, each generation has different priorities and challenges. For Baby Boomers, it's a matter of ready or not, here it comes.
-
How to Avoid a Big Hassle if Your Financed Car Gets WreckedHow an insurance check is made out for repairs can cause a world of problems if the lienholder is left out.
-
Estate Planning Strategies to Consider as Election NearsAre big changes in tax laws coming soon? Not likely, but you might want to take advantage of higher estate and gift tax exemptions well before the end of 2025.
-
How to Get Your Money's Worth From Your Financial AdviserA good financial adviser will focus on how your financial planning and investment strategy align with your lifestyle and aspirations.
-
Think of Prenups and Postnups as Financial Planning ToolsThese contracts provide a clear framework for asset management and protection and are especially useful if you get married later in life.
-
Congratulations on Your Raise: Three Things to Do With ItWe're not saying you shouldn't spend it on a new car, but there are some considerations to guard against lifestyle creep and to help ensure a comfy retirement.
-
Check Off These Four Financial Tasks to Finish 2024 StrongThe new year is a popular time to set financial goals, but now is the ideal time to check how you're doing. Four tweaks could make a big difference.
