It seems that the internet has remained fairly immune, even during this time of economic recovery. In fact, according to recent Forrester Research predictions, e-commerce is on track to account for 53 percent of all purchases by 2014. Read that again – within 3 years over half of all purchases are going to be made on the internet! If your small business is not yet selling on your website, you had better start now.

But with Walmart controlling the vast majoring of purchases in physical stores, and Amazon doing the same for online purchases, what is the small business owner supposed to do to compete in today’s economy? The answers may surprise you.

1.    Differentiate yourself. Face it – you cannot compete with Walmart or Amazon, so don’t try. Instead, you need to figure out what you can do that these giants cannot do. Remember the old advertising slogan from Avis, “We’re number two – we try harder!”? As the industry leader, Hertz was unable to compete with this because doing so would admit that they were not the leader. The problem with Amazon and Walmart is that they are trying to be all things to all people. You can beat them by finding a niche and serving that niche very well.

2.    Sell a single product. OK, so you’ve found a niche – now select a single product from that niche to create a website. Here’s where I get lots of resistance, but single item websites actually out-perform many multi-item websites. Let’s say you sell fine quality writing instruments. If you put up a website showing the 10 brands of  luxury pens that you offer, your site will look like many others offering the same 10 brands of pens. But if you have a website that sells a single hand-crafted pen, customers will look at you as the single-source expert on that style of pen, and your sales are likely to be better than if you offered it along with 9 other brands. If you are really worried about this, create 11 different websites – one for all of your brands and one for each individual brand and see for yourself.

3.    Create customer loyalty. Loyal customers can be your best advocates for evangelizing your products and brand, while helping you to dramatically gain new business. New online store owners are often overly-concerned about search engine placement. Rather than concentrating on becoming number one on Google, concentrate on creating customer loyalty. Word of mouth is still the number one reason people visit websites, so give your customers a reason to recommend your site to others. High quality content, video demonstrations of your products, and free tools or widgets are just a few ways to get customers to pass your site on to others with similar interests.