Amazon began by selling books online. Now it controls 43% of US digital commerce – a market position that forces brands to make tough choices about their digital strategy.
The choices brands face go beyond just selling online. They must decide: build their own sales channels, join Amazon’s marketplace, or blend both approaches. Each path brings trade-offs. Amazon offers massive customer reach but takes a big cut of sales and keeps customer data. Building your own channels costs more upfront but lets you control the full customer experience and protect your margins.
Success in online retail today isn’t about choosing between competing with Amazon or joining them – it’s about excelling at both. Smart brands know they need Amazon’s reach, but they also need strong independent channels that build customer relationships and protect margins. The real challenge is managing this dual presence effectively.
But here’s the problem: running successful e-commerce operations on multiple fronts requires sophisticated technology, specialized talent, and complex operations. Many brands find themselves struggling to manage both their direct channels and marketplace presence, while others get trapped choosing one path at the expense of the other. There has to be a smarter way to sell online.
Amazon’s E-commerce Leadership: Why Partnership Beats Competition
Amazon has transformed from an online bookstore into the defining force in modern e-commerce. In 2023, Amazon accounted for 39.6% of all U.S. ecommerce sales, and its share is projected to reach 41% of the total U.S. retail e-commerce market. Amazon has created an ecosystem that sets the standard for online retail excellence. Their success isn’t just about size—it’s built on relentless innovation in customer experience, logistics, and technology.
Amazon’s advantages are formidable and worth understanding. Their nationwide network of fulfillment centers enables two-day shipping at scale, while billions invested in research and development keep them at the cutting edge of e-commerce technology. For customers, this creates an unmatched shopping experience combining vast selection, competitive prices, and reliable delivery. For merchants, it offers access to hundreds of millions of active buyers through a sophisticated marketplace platform.
While Amazon’s success has earned them significant marketplace fees—ranging from 6-45% depending on category—these reflect the value of their platform and infrastructure. Their fulfillment network, payment processing, customer service, and marketing tools represent massive investments that individual retailers would struggle to replicate. This is why smart brands today focus less on competing with Amazon and more on how to leverage their platform alongside their own direct channels for maximum benefit.
How Modern E-commerce Shifted Beyond Marketplaces
Online retail has moved past the simple choice between Amazon or your own store. Smart brands now combine marketplace sales with direct customer relationships to maximize their reach and profits.
Building Direct Customer Connections
Marketplaces put millions of shoppers within reach, but they block brands from knowing their customers. By creating their own online stores, brands gain control over the shopping experience. They can react faster to what customers want and keep more profit by cutting out marketplace fees.
Competition on major marketplaces keeps growing, driving up advertising costs and cutting into margins. Brands that build their own stores can create unique shopping experiences that stand out. They control everything from how products look to special offers, building stronger connections with customers who come back to buy again.
Using Data to Drive Growth
When brands sell directly to customers, they collect detailed information about shopping habits and preferences. This helps them create better products and smarter marketing campaigns. Combining this with marketplace performance data gives brands a complete view of what works.
This first-party data becomes a powerful tool for growth. Brands can spot trends early, test new products with existing customers, and create targeted marketing that brings better results. They can also improve customer service by understanding exactly how people use their products and what problems need solving.
Making Both Channels Work Together
The best brands don’t pick sides – they use both marketplaces and their own stores strategically. Marketplaces help new customers find products, while direct sales build lasting customer relationships. This two-channel approach lets brands meet customers wherever they shop while keeping control of their brand story and profits.
Technology has made this balanced approach easier than ever. Cloud platforms handle complex operations like inventory tracking across channels. AI helps predict demand and automate marketing. Mobile shopping keeps growing too, with over half of customers now preferring to buy on their phones. Smart brands use these tools to create smooth shopping experiences no matter where customers find them.
Blending Amazon Strategy with Brand Independence
The future of e-commerce isn’t about choosing between Amazon and independence—it’s about mastering both. Here’s why trying to compete with Amazon in isolation is no longer the best strategy, and how a blended approach offers better opportunities for growth.
The Reality of Going Solo
Building an independent e-commerce operation requires massive investment across multiple fronts. Brands need sophisticated tools for everything from customer engagement to inventory management. Each addition brings new complexity: marketing automation, analytics platforms, fulfillment solutions, and customer service systems. Even basic operations like promotion management and inventory tracking demand specialized software and expertise.
The talent requirements are equally daunting. Success requires specialists in digital marketing, user experience, data analysis, and supply chain management—all commanding premium salaries. These teams often work in isolation, creating inefficiencies. Marketing campaigns fragment across social media, email, and paid search. Customer data gets trapped in different systems. The result? Higher costs and lower effectiveness.
Why Pure Independence Falls Short
Even with substantial investment, matching Amazon’s operational efficiency remains nearly impossible. Their fulfillment network, pricing power, and customer reach create unmatched advantages in speed and cost. Most importantly, customer shopping habits are deeply entrenched—when most Americans start their product searches on Amazon, fighting this behavior instead of leveraging it means missing out on enormous opportunities.
The Power of a Blended Strategy
Smart brands are adopting a more nuanced approach. Rather than avoiding Amazon, they’re using it strategically while building their own digital presence. This dual strategy allows them to:
- Tap into Amazon’s massive customer base and world-class fulfillment
- Build direct customer relationships through branded channels
- Maintain higher margins on direct sales while benefiting from Amazon’s scale
- Create unique brand experiences that complement marketplace presence
The key isn’t choosing between Amazon and independence—it’s finding efficient ways to excel at both. Successful brands today understand that competing in modern e-commerce means leveraging every available channel while maintaining a unique identity and direct customer relationships.
Understanding Amazon’s Role in Modern E-commerce
While Amazon offers unmatched reach and infrastructure, many vendors are discovering the strategic importance of maintaining their own direct channels alongside marketplace presence. Amazon’s sophisticated platform collects comprehensive data on shopping behavior, using these insights to continually enhance their customer experience. While this benefits the overall marketplace, it means vendors have limited access to customer data and analytics about their own products’ performance.
This reality of marketplace selling creates compelling reasons for brands to develop their own channels. On Amazon, vendors face natural constraints: they can’t implement custom tracking, create unique shopping experiences, or build direct relationships with customers. While these limitations are understandable given Amazon’s focus on consistent customer experience, they highlight why many successful brands pursue a dual-channel strategy.
Think of it like this: Amazon provides the equivalent of a premium retail location in the world’s busiest shopping mall. The foot traffic and infrastructure are invaluable, but smart brands recognize the benefits of also having their own flagship stores where they can control the complete customer experience, gather detailed insights, and build lasting relationships. It’s not about choosing between Amazon and independence—it’s about leveraging both to create a stronger overall market presence.
Blending Amazon Strategy with Brand Independence
The future of e-commerce isn’t about choosing between Amazon and independence—it’s about mastering both. Here’s why trying to compete with Amazon in isolation is no longer the best strategy, and how a blended approach offers better opportunities for growth.
The Reality of Going Solo
Building an independent e-commerce operation requires massive investment across multiple fronts. Brands need sophisticated tools for everything from customer engagement to inventory management. Each addition brings new complexity: marketing automation, analytics platforms, fulfillment solutions, and customer service systems. Even basic operations like promotion management and inventory tracking demand specialized software and expertise.
The talent requirements are equally daunting. Success requires specialists in digital marketing, user experience, data analysis, and supply chain management—all commanding premium salaries. These teams often work in isolation, creating inefficiencies. Marketing campaigns fragment across social media, email, and paid search. Customer data gets trapped in different systems. The result? Higher costs and lower effectiveness.
Why Pure Independence Falls Short
Even with substantial investment, matching Amazon’s operational efficiency remains nearly impossible. Their fulfillment network, pricing power, and customer reach create unmatched advantages in speed and cost. Most importantly, customer shopping habits are deeply entrenched—when most Americans start their product searches on Amazon, fighting this behavior instead of leveraging it means missing out on enormous opportunities.
The Power of a Blended Strategy
Smart brands are adopting a more nuanced approach. Rather than avoiding Amazon, they’re using it strategically while building their own digital presence. This dual strategy allows them to:
- Tap into Amazon’s massive customer base and world-class fulfillment
- Build direct customer relationships through branded channels
- Maintain higher margins on direct sales while benefiting from Amazon’s scale
- Create unique brand experiences that complement marketplace presence
The key isn’t choosing between Amazon and independence—it’s finding efficient ways to excel at both. Successful brands today understand that competing in modern e-commerce means leveraging every available channel while maintaining a unique identity and direct customer relationships.
Amazon Alternatives: Smart Strategies for Marketplace Success
Today’s e-commerce landscape offers numerous alternatives to Amazon, each with unique advantages for different types of sellers. Smart brands aren’t limiting themselves to a single marketplace—they’re building presence across multiple platforms while developing their own direct channels. This diversified approach reduces dependence on any single platform while maximizing reach and resilience.
The key to successful multi-channel selling lies in understanding each platform’s strengths and audience. Walmart Marketplace, for example, appeals strongly to value-conscious families and offers seamless integration with their physical stores. eBay excels in unique and collectible items, while Newegg dominates the tech space. By carefully selecting platforms that align with their products and target customers, brands can build a strong presence across multiple channels.
Building this multi-channel presence requires sophisticated inventory and order management, but the benefits are compelling. Brands reduce their vulnerability to any single platform’s policy changes or fee increases, while gaining valuable insights from different customer segments. This broader market presence also creates opportunities for platform-specific pricing and promotion strategies that can drive overall growth.
Marketplace Comparison: Key Features and Considerations
| Platform | Key Strengths | Commission Rates | Unique Features | Best For |
| Amazon | Largest customer base, Prime shipping | 8-45% | FBA, Prime eligibility | Most product categories |
| Walmart | Family-focused audience, store integration | 6-20% | Two-day delivery, no listing fees | Mass-market products |
| eBay | 183M active buyers, auction format | 10-15% | Bidding system, unique items | Unique/collectible items |
| Newegg | 36M tech customers | 8-15% | Tech-savvy audience | Electronics/components |
| Bonanza | Unique product focus | 3.5% | Google/Bing integration | Specialty/boutique items |
| Rakuten | Global reach | Varies by category | International presence | Cross-border selling |
Succeed with Nogin’s Full-Spectrum E-commerce Solution
Running successful e-commerce operations across multiple channels requires sophisticated technology, specialized talent, and complex operations that many brands struggle to manage effectively. That’s where Nogin’s Commerce-as-a-Service (CaaS) solution makes the difference, providing everything you need to excel at both marketplace and direct-to-consumer channels.
Nogin delivers a complete suite of e-commerce solutions that covers every aspect of your online business. From UI/UX design and creative services to marketing, logistics, and customer support, our team of over 150 e-commerce specialists acts as an extension of your team. This comprehensive approach helps brands achieve an average of 39% growth in their first year while gaining 5-8 points in operational efficiency.
With Nogin, you get three dedicated team members plus on-demand access to fractional specialists across every discipline – from SEO experts and content creators to data analysts and developers. This dynamic staffing model ensures you have the right resources when you need them, eliminating the burden of managing fixed overhead costs that don’t scale with seasonal demands.
Leading brands like Kenneth Cole, Hurley, and Scotch & Soda have already discovered how Nogin’s outsourced approach drives higher growth while reducing operational costs. Our percentage-based pricing means costs remain predictable and scale with your sales, with no upfront investment required. Best of all, you can be up and running in as little as 30-60 days, allowing you to quickly modernize your e-commerce operations while maintaining focus on your core brand vision.
How to Compete with Amazon FAQ
How can retailers compete with Amazon?
Retailers can compete with Amazon by leveraging Commerce-as-a-Service (CaaS) technology like Nogin’s, which provides the infrastructure, tech, and specialist support necessary to grow their business. This approach allows them to optimize their ecommerce operations without the overhead costs of traditional enterprise systems, making their operations more efficient and scalable.
What does Amazon do to differentiate itself from competitors?
Amazon differentiates itself by focusing on convenience, variety, and customer-centric innovations. It offers extensive product selections, competitive pricing, and fast, reliable delivery options, including two-hour delivery in some areas. Features like one-click purchasing and personalized recommendations enhance the shopping experience. Amazon’s Prime membership adds value with benefits like free two-day shipping, which solidifies its competitive edge by prioritizing customer convenience and satisfaction.
Why is it hard to compete with Amazon?
Competing with Amazon is challenging due to its vast selection, competitive pricing, and rapid, reliable delivery services. Amazon’s advanced technology, such as AI and cloud computing, and customer-centric programs like Amazon Prime enhance its operational efficiency and customer loyalty. These factors combine to create a shopping experience that is difficult for other retailers to match.
