#6 DIFFERENTIATION: The crucial ability of private labels.
3 steps for winning eCommerce competition in 2022+
PPC doesn’t work? Spending tons of time on promotion with no result?
Keep losing money with no clarity when the business may become profitable, while stronger competitors accelerate their growth?
A familiar situation, especially for small sellers… 😞
❓ Want to know WHY it is happening?
I can give a few valid reasons.
☝️ First, realize that sellers...
➡️ learn from the same online courses.
➡️ ask the same “gurus” who have a general idea about technical PPC execution but NO actual consumer and marketing knowledge.
➡️ hunt the same keywords for ranking and PPC.
➡️ search next “best selling products” from the same sources
➡️ limit skills to selling on the platform, with no broad understanding of product and brand development.
💥As a result, most sellers CLONE EACH OTHER in how they do business:
sell similar products
operate within equally the same practices and tools.
Doing ranking and paid campaigns based on typical products, tricks and methods don’t mean the platform will offer everyone an equal share. Instead, the platform will prioritize competitors with better ratings, more reviews, higher sales volume. The rest of the smaller competitors will be burning out money - until they come up with something different.
☝️ On the opposite side...
For decades, corporations and big companies have built advanced R&D centers and practiced tools like:
💡Design Thinking 💡Design to Value
(Pic: P&G R&D Center, Mason, Ohio)
They are continuously looking to innovate unique and cost-efficient consumer products. To earn money offering the market something different.
☝️ Another example...
Raising aggregators.
According to Sifted and other industry news feeds, eCommerce aggregators were booming on global marketplaces in 2021. They raised tons of money for acquisitions, product, and process improvements on a big scale. Can we assume this trend will grow in 2022+?
We can guess about their future approach from the knowledge and skills they are looking for today:
➡️ Product managers - to strengthen connections with a consumer and deliver crafted product solutions.
➡️ Supply chain managers - to enhance efficiencies across the supply chain
➡️ Product development experts - to improve margin and profit at big scale
In summary, most advanced eCommerce private labels have started applying effective product differentiation methods.
This situation may sound like a danger for smaller sellers. However, two significant opportunities open up:
Prepare private label to sell and quit the business
Learn from leaders to accelerate the development of your own business.
It’s time to take important learning, especially if you plan to follow the second scenario:
❗ Product differentiation is CRUCIAL for all private labels doing business in 2022+!
In the meantime…
We can often hear from sellers that many categories have limited differentiation opportunities. That is right! - as long as you think of differentiation at a solopreneur level.
We can also hear someone keep saying - "find a demanded product, make an improvement, and launch." This approach is not practical anymore.
✋ This is NOT the way to go if you want to grow big.
Differentiation is much more complex today. Time of improved “me too” products targeting any customer has gone. Instead, it’s time for professional product approaches, well-targeted niche private labels, consumer-centric product differentiation methods.
It’s time to move from white-label to actual private label. You will see endless opportunities when you start thinking of differentiation as an owner of a long-term business.
❓ Do you think it is TOO EXPENSIVE for your business?
Yes, it may be. But it is FREE when it comes to the way of thinking. Significant improvements can be made with small steps when you start thinking differently at a minimum or no cost.
What does it mean?
Mowing from a white label to a private label thinking is all about determining three things:
➡️ WHO your client is (ideal client profile)
➡️ WHAT primary pain/need of the client you (can) serve
➡️ HOW exactly your product can solve the pain
Is it really so expensive? - It is not! But it gives a chance to build your roadmap to a more advanced business.
On the way to build a long-term model, the goal will be to address your understanding of the product attributes, and make three main differentiators work in complete synchronization:
✅ Design
✅ Functionality
✅ Value proposition
Step-by-step improvements will enable growth, investment funds, and business pay-off
The next article will be all about the effective blending of three components together. Stay tuned!
