Competitive advantages are what distinguishes the actual activity of your ecommerce development. From other market players and what your customers really need. That is, they are ready to choose you and pay for these differences. Now, we want to talk in more detail about who should look for a company’s competitive advantages. And where to start.

What is the key difference?

In the case of “commercial activity”, we do not create additional value for customers. We have a product, here it is – buy the product. Together with us, 100 more sellers buy and sell the same shampoos. The main weapon of competition is dumping.

In the case of “entrepreneurial activity”, we create additional value for customers beyond the product itself. Our business model is much more complex than in the first case: it requires deep work with the client, identifying needs and searching for some unique solutions that are in demand by clients. This is necessary so that the client is ready to pay more for our shampoos than he would pay for other shampoos on OZON — and so that this difference covers our costs.

The key difference is some kind of “additional value” that becomes a reason for clients to choose us.

Now let’s transfer this model to any other market

Both options create value for the client. But in the case of “Commercial activity” there are thousands of identical companies on the market, and the “value” becomes standard. Like those 1000 identical shampoos in the OZON catalog. And in the case of “entrepreneurial activity” — there is one such company on the market.

If you take an already working business model from the market and simply copy it without changes, then you are not engaged in entrepreneurship, but in commercial activity. And then it is completely logical that the only weapon in your case is dumping and a lot of advertising.

There is one important thing to understand about this ecommerce development structure:

There will always be those who will give you a bigger discount or invest more money in advertising.

You will lower your prices. They will too. And you will too. And they will too. “Fatter” companies with more resources will always be able to sacrifice margins more easily. Maintaining ecommerce development due to a larger market share. Sooner or later, you will still have to find “additional value” (competitive advantages). Or close down, which is more common.

In any market, there is always room for just 1-2 companies that offer the lowest price. They are able to maintain it due to their scale and powerful operational processes. Often, there are some technological features within a business that allow them to maintain marginality. For a small business, competition in this area is death.

Therefore, in reality, the key task that a CEO (owner) should be engaged in. From the day the business is founded is to look for that very “additional value”.

Every CEO should be think ecommerce development

The working day of a CEO in a classic small business looks like the working day of a manager: money, planning meetings, bills, hiring. In between, there is also marketing, sales, somewhere manually redoing something after employees, somewhere tinkering with some process, somewhere putting out fires. The result is a profession of “CEO – marketer – financier – traffic manager – HR specialist – tester – salesperson”.

If you dig into business education, you will see training in many management and hard skills (from financial planning to marketing and sales). But nowhere will we find work with clients and the search for value. Business education tells us that we need to search for ecommerce development.

These programs teach system management and how to make a business operationally efficient. But they don’t teach you how to be ecommerce development.

Our actions are always limited by our knowledge and experience. If we don’t know what needs to be done differently or even “in another place” – we don’t see what exactly we’re wrong about. A “blind spot” appears.

That’s exactly why starting a small business very often looks like a “copy-paste” from a larger player or from the founder/CEO’s previous place of work: the owners are not looking for value, but repeating existing experience. No one said what needs to be done differently.

This approach cannot lead to the creation of a large company in an established market. By the time of “copying”, there are always several players in the industry that have occupied 80% of the capacity. To knock them out of there, such a gigantic amount of money will be required. That it is easier to invest in Elon Musk.