4 Ways Small Merchants can Stay Competitive

Staying competitive in 2018 and beyond is anything but easy. Everyone’s turning their hobbies into viable businesses, or simply trying to insulate themselves from layoffs and cutbacks that happen when the economy takes a downturn. The trouble is, staying competitive requires both creativity and flexibility (Ie., open-mindedness). Customers don’t have to shop with you. There are too many big box retailers out there making online and offline shopping as easy as possible.

If the competition is doing everything they can to one-up you, and you’re sitting back in a chair waiting for customers to come in, and for online orders to hit your inbox, you’re simply not doing enough. We all know about having a great website and strong social presence in this day and age. Beyond that, in order to be competitive nowadays, you just need to be honest with yourself, and understand what your ideal customer wants most.

Clothing shop owner

SumUp.com, a mobile payment company that now live and fully operating in the USA, shares four ways for small merchants to stay competitive and more profitable vs. their bigger counterparts.

1. Narrow your focus and look for those willing to pay full price

Unless you’re offering dollar store prices, you can’t have a million products in your lineup. Dollar stores like the Dollar Tree and Dollarama are going to destroy you every time, with tons of warehouse space, and outlets galore they can send discounted products out to sell at. Then, you have people also buying those products and selling them on Amazon and Ebay for double the price they paid from the aforementioned, or a manufacturer in China.

A smart merchant in this day and age will narrow their focus to desirable, unique products with high margins, and low overhead costs to store them. While many of the tips on this page will tell you not to be a cheapskate, you don’t want to chase after the cheapskate customer looking for last year’s closeouts. Cheap products are usually in low demand and/or they’re disposable and people will always look for the best deal.

You want to niche down and look for new and emerging products to sell in your business. They want no hassle returns and exchanges too. Look at all the brands out there who mail clothing straight to their customers, let them try them on, and return what they don’t want. That’s a unique, new, and refreshing service to provide to customers that retailers wouldn’t have dreamed of just a few short years ago.

In the service industry, hammer customers with the best service you can deliver. Don’t waste your time and money honing bad customer service reps — if they’re driving customers away, send them packing! Pay more for your service staff and you’ll quickly realize you get what you pay for. There’s a reason you get nothing but stellar, top-level service and quality at Providence in Los Angeles, yet never have a clue how the waitress will treat you at the local Denny’s.

Credit card payment processing at the till

2. Don’t be a scrooge with transaction fees

Transaction fees, particularly those at the payment terminal, are a real problem for customers. Quite simply, they don’t want to pay them! A lot of smaller merchants, offline and off, feel justified in charging a transaction fee for debit payments. Of course, they have to pay out thousands a year in fees.

Consider that customers will always go to you over the competition if they don’t have to hit the “OK” button when asked if they choose to accept the $1 or $2 fee every other small merchant feels compelled to charge, or be told they can’t use credit and collect their rebate benefits. Many smaller retailers have actually started a rebellion, refusing to accept credit cards in their business due to high fees they have to pay.

But that doesn’t have to be the norm, though.

Small merchants can “get away” from the transaction fees dilemmas – simply by partnering with the right merchant payment service. SumUp, for example, enables small merchants to save money by charging a low transaction rate on credit card processing. You might assume that low rates equal poor service – this is not always the case, though. SumUp features stellar customer servicelive customer service, available to merchants from 9AM to 7PM, Monday to Friday.

Credit card transactions are an issue, indeed, because these companies don’t allow merchants to charge a fee for their customers to pay via credit. Just be honest with yourself though, this is the cost of doing business. Think of what you’re losing — how many people simply don’t have cash to pay for their items.

Choosing shipping provider

3. Be Santa and not a Grinch on shipping fees

Santa doesn’t charge kids shipping, and you probably shouldn’t either, unless it’s truly justified. One word sums it up here: China. Look on Ebay and you’ll see many US retailers competing with high-rated Chinese sellers, offering much lower prices and free shipping for the exact same products. A lot of these sellers are doing arbitrage and drop-shipping.

This exists everywhere online, and savvy modern customers won’t buy from you until they compare your product cost and shipping prices with other retailers.

Stepping away from that example, most people are going to let their thrifty side do the decision-making and opt for cheaper prices and cheaper shipping (again, preferably free).

Do whatever you can to be a Santa and not a Grinch in the shipping cost department. Pad a little extra money into the price, then offer free shipping. Work a deal with your local UPS or FedEx office to give you better rates on one and two day shipping, in exchange for a promise you’ll give them “X” amount of volume per month.

Florist and his customer

4. Be a more engaging and present human being

Millennials and Gen Xers notoriously want better — more informed, engaged, and human service. It doesn’t matter if you’re running a Shopify store or cozy fashion boutique in the local mall. Don’t mistake engaged for being a pest — constantly emailing for feedback and asking for another sale — or following prospects around your store asking them a zillion questions. That’s just revisiting the way things were done in the 90s and early-to-mid 2000s.

Talk to them. Ask them about their needs. Train your employees to do the same, if applicable to your sales model (Ie., you’re not a faceless ecomm that uses bots for customer service). They want to have conversations, where the other person actually gets what they’re saying and what they need.

For instance, don’t try to sell them the highest end gadget when they’re clearly telling you they just want something that works. If they like your service, they’ll come back and upgrade when they realize “just works” isn’t good enough for them.

Same goes for online selling. Set yourself apart from the competition by offering a phone number to call, in addition to chat windows, free mobile shopping apps, and engagement on social media. Each customer will have a different preference. Offering them the type of service they want, while being a more present merchant is the only way to compete in this day and age.

Happy customer at a coffee shop


The merchant landscape is changing. Big box is hard to compete with. They can afford the warehouse space to sell multiple products, and have the infrastructure to unload products that don’t sell, at minimal financial loss. Almost all offer free shipping to a local outlet or the customer’s home. They don’t gouge people with transaction fees, or a frustrating return process.

They can also afford to pay staff a competitive wage, benefits, and opportunities to move to the highest level of their organization. As a small merchant, you have to niche-down, while offering the same level of service and a better overall customer experience, to compete with both the big boys, and the little corner shop down the street trying to do the same thing you are.