Staying competitive in a maturing market
In an increasingly challenging economy, many e-commerce entrepreneurs are leveraging AI to stay competitive and enhance profitability. Here are Gary Huang’s insights.
It’s not easy being an e-commerce entrepreneur today. “This economy is becoming more difficult, especially for Amazon sellers,” says Gary Huang, an experienced e-commerce entrepreneur and founder of the 7 Figure Seller Summit, a free online event from June 10-12, 2024. “The market is maturing. It’s not as much of a land grab as it was before. Sales growth rates are flat this year.”
Enter AI. Many people running businesses are experimenting with AI to streamline low-value, repetitive tasks and boost profitability in times of heightened competition. According to market research firm Statista, the global e-commerce market is expected to grow from $5.8 trillion to over $8 trillion by 2027. As noted in a recent report by Shopify on e-commerce trends, “Being agile has never been more important.”
But using AI isn’t as simple as it sounds, given the multitude of new tools to navigate, the deluge of information from all directions, and the learning curve, notes Huang.
So how do you harness AI for your benefit? Here are some ideas Huang shared on how to use it:
1. Smarter Pricing: Many sellers hesitate to raise prices for fear of losing rank or being undercut by competitors, Huang explains. AI can assist with this. For example, Profasee, an AI-powered tool, can optimize your pricing on Amazon. “Think of it like Uber surge pricing, based on product demand,” Huang suggests. “It will find the optimal price for you, whether your aim is improved profitability or a higher ranking.”
2. More Efficient Market Research: A tool like Helium 10, powered by AI, allows you to study a competitor’s listing and utilize the “Review Insights” feature to gather insights on how to compete. “Imagine they have 1,000 reviews,” says Huang. “Previously, you’d manually sift through 20 pages of reviews to find two-star, three-star, and four-star ratings, identifying customer complaints to uncover product improvement opportunities. Now, you can download these reviews and upload them to ChatGPT. ChatGPT can quickly highlight the major issues with your competitor’s listing.”
3. Enhanced Profitability: Storing goods in warehouses for extended periods can incur significant costs, Huang points out. “Amazon dislikes their fulfillment centers being used as warehouses,” he notes. “Therefore, savvy sellers employ robust inventory management systems often integrated with their e-commerce software to minimize tedious tasks.” “AI is an excellent tool for sellers to achieve more with less effort, saving time and boosting productivity,” says Huang. “I’m not suggesting AI can replace humans entirely, but the trend indicates AI is a tool you can utilize alongside your team. Knowing how to leverage it effectively can save time.”
These insights from Gary Huang highlight how e-commerce entrepreneurs are navigating today’s challenges with AI, aiming to thrive in a competitive landscape.