Creating ‘High Barriers To Entry’ – A game-changing Strategy to Adopt this Holiday Rush

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Have you heard of the Blue Ocean strategy? Or have you ever thought of creating a monopoly in your market arena? If not, this festive season and the coming ones will only give you a hard-selling experience with bare-minimum profits and marketing struggles throughout. What can be done then? Well, the answer is here, ‘CREATING HIGH BARRIERS TO ENTRY’ in your business area. To be recognizable in the vast eCommerce platform, you will have to reduce your number of competitors by creating entry barriers that are difficult to break.

Halloween, Black Friday, Cyber Monday, Thanksgiving, Christmas are all here, and like you, your competitors are also looking forward to the best strategies. But trust the fact, no strategies can help you take the market lion’s share with an ordinary approach. Undoubtedly, it is only by creating unbreakable and exclusive barriers to entry that can actually help you build your business empire, one of its kind.

What are Barriers to Entry in eCommerce?

Barriers to entry in eCommerce refer to those factors that do not allow new entrants or weak contestants to enter or stay in the market. Big eCommerce giants bring some of the unbelievable factors that are difficult to overcome. For instance, they are often Brand equity, distribution network, light asset strategy, low-cost production, and distribution or license or copyrights.

Creating such high standards or barriers raises the bar for new start-ups or businesses to think of competing with them. Furthermore, creating such common and high barriers to entry has perpetual benefits.

Why is it important to set High Barriers to Entry for bringing down your competitors?

Creates Monopoly

Firstly, entry barriers enable the strongest businesses to build a monopoly in the market. What it means is that no other startup can enter into the competition. In other words, that market area is ruled by a few conglomerates that are in a strategic partnership to fence market prospects from newcomers.

Prevents and Restricts competition

Secondly, entry barriers actually keep out the newcomers from eating into the market share. These barriers are of a different intent. Either an unprecedented cost, price, or customer experience is brought into the picture or a completely new market is created or an uncontested market is targeted. It needs a lot of R&D and constant market evaluation.

Provides Large Market Share

Thirdly, the monopoly market aims at devouring the largest market share by raising the bars so high that nobody else except an equally powerful competitor can think of entering into the competition. Some of the tactics like ‘Economies of scale’ or ‘heavy capital investment’ or ‘proprietary technology’ are unbeatable and costly barriers to cross-over even by established brands.

Retained Customer Base

Fourthly, strong entry barriers target some specific target audience. In other words, their target audience is well defined. They know why, where, and whom to target. With fewer options to choose from, the customer sticks to just one service provider. Customer retention in this case is an outcome of a lack of options to explore than service quality.

Emerging as market leaders

In addition, centralized control over the market share makes some brands the leaders of their area. The eCommerce industry too has many such examples of food outlets that have emerged as market leaders catering to its customer base without much competition to tackle with. However, the key point is to know your consumer trend.

Makes the existing market irrelevant

Last but not the least, entry barriers sometimes prove to be a game-changer for the existing market. They are trendsetters that have never been thought of. A new technology or new product with exclusive rights shifts the entire consumer base to one brand and makes the existing ones irrelevant or less suitable for consumers.

Prominent Types of Barriers to Entry prevalent in the eCommerce Industry

There are 3 significant Entry barriers that are generally invested in for reducing the existing competition threat.

• Legal/Government Barriers
• Natural/ Financial Barriers
• Marketing/self-made Barriers
• Brand Loyalty

Legal Barriers

Legal barriers are those which have permission and protection under the acts and regulations of a state. Intellectual property rights are legally approved and are shielded against any fraud or infringement act by competitors.

Natural/Financial Barriers

Many business industries have already gained control over good resources, distribution partners, high-end technology, and machinery at their end. The total production cost, sales, and marketing costs have already been mastered by the existing leaders, this makes them invincible.

Marketing/self-made Barriers

These are the marketing strategies like advertising, social media campaigns, polls, paid ads, brand awareness, etc that create a great barrier for upcoming competitors. Internet is all over the place and omnichannel experience takes a good share of consumer attention and thereafter converting them into loyal ones.

Brand Loyalty

Brand Loyalty is beyond logic. It is all about creating trust and credibility in the minds of potential consumers. A great brand loyalty strategy once built, is irreplaceable. Brand Loyalty overlaps even other factors. Once people invest their trust in your brand and product, you might lose a battle but have won the war.

Now the question here is how can you gravitate with these entry barriers and secure your position in the festive season. Below are some best ‘Entry barriers’ that you too can create and get an edge over your competitors.

Top strategies for Barriers to Entry to beat the competition this Holiday Rush

Creating a game-changing market barrier is not a child’s play is obviously not when every competitor is equally potent and capable to lead the market. Selling on marketplaces like Amazon, eBay, Etsy, Walmart, and many more, is a monopolistic competition, and to make it a monopoly is a hard nut to crack. However, with a prolonged and deep analysis, you can for sure come up with that one factor that will give wings to your business to fly ahead of others.

Here is the list of some of them:

Intellectual Property Protection

Intellectual property right is necessary to make you a recognized and dependable brand with consumer-friendly products. Copyright, Patent, or Trademarks are your exclusive property that no one else can sell or create without your permission. It is your innovation, your idea, and the hard work that you own exclusively.

To sum up, this can be one way to set your standards high amongst your competitors. Any product which you think has your innovation attached to it must be legally protected against any future fraud copyright infringement. Not just this, such recognitions add value to what you sell, giving your target audience an extra reason to choose you over others.

Selling Licenses

License is the legal permission to sell, trade, or import/export anything. Cross-border selling is in trend but for online sellers what is important here to know is that you have to follow CBT regulations and legal criteria to enter into the marketplace of other countries. Obtaining a license is a battle in itself but once take, you are all set to go ahead of your competitors who might still take time to get a license or government approvals.

Chiefly, having a selling or Trade license shouts your credibility and reliability factor. eCommerce platform, where everything is virtual and less secure, this can be added advantage.

Fast and Efficient Distribution Network

Distribution network plays an important role in positioning your brand and product in the market. It directly impacts your demand and supply chain. A fast and efficient distribution network ensures easy accessibility, affordability, and availability of products in the market.

During peak festive season, you need to be on good terms with your Logistics and distribution partner for fast and safe delivery to your customers wherever they want. Current consumer trends have shifted to a fast, free, and one-day delivery craze amongst customers. To cater to these demands distribution networks can act as a great entry barrier for year fellow competitors.

Make a note here, there are eCommerce solution providers that have the best shipping solutions and logistic providers for your hassle-free distribution network.

Exclusive Rights

This entry barrier is unique and interesting to explore. Allies and partnerships can be of a great strategic move. As sellers, you can grab some exclusive rights to sell a particular type and quality of product from your partners who can be a manufacturer.

Exclusive rights give you an edge over others to sell a unique product that nobody else has to offer. Your product pages and Landing pages can be a great source for you to boast about your achievements and exclusive rights that only you can cater to your buyers.

Economies of Scale

This market barrier takes time to bring on the ground. Economies of scale in simple terms means ‘ A significant point where production of a company increases without an increase in the production cost. High production with a low per-unit cost is Economies of scale.

To put in other words, established online sellers can create a high entry barrier by producing and manufacturing products in large quantities with low production costs and selling the products at the lowest price possible. Thus, throwing a highly competitive price for your competitors to break. It is needless to say that consumers are attracted towards good products and lowest deals.

Proprietary Technology and Tools

If you are a seller who sells technology or software or other scientific items either on marketplaces ( should not be prohibited) or on your own e-store, this one is for YOU!

A tool, software, or system can be safeguarded under proprietary papers so that only you and limited people have the access to its secret codes. If you are a potential businessman selling any such smart technology, you must shield it before a copy of it competes with you and take away your market share.

The other idea is selling with Integration solutions. Not directly but indirectly it acts as your secret proprietary tool. You get the best-automated features and tailored solutions just suitable for your business. Be it any marketplace or framework, these integrations help you pave an easy, hassle-free, sure-shot way to hit your goals, especially during the festive season.

Great Customer Service

Customer experience is the KING! This includes both pre and post-sales services. Personalized content, omnichannel shopping experience, best checkout ad delivery services, customer-centric return policies, and delighting them with offers and discounts generate Recall Value to your brand.

Some great customer delight and engagement practices can add up to your Brand Loyalty and Recall Value. If achieved, increased customer retention can be a challenging barrier to overcome for your competitors.

To help you fasten up your customer service in a short period of time, CedCommerce provides the best check-out solutions, shipping solutions, AI features, marketing, and digital solutions that gravitate your customers towards a great customer experience in your e-store.

Building Brand Equity

This is not just a commendable entry barrier but an achievement in itself. Brand equity surpasses the name of the product or service with the Brand name itself.

To begin with, you can aim at branding your product and positioning it in a way that your consumers identify the product with your name. Let your craft, tools, recipes, merchandise, etc, be names after your brand. Sounds difficult to achieve? With a great team, focused approach, and constant evaluation things are possible.

CedCommerce can help you build brand equity in a short period of time. Right from setting -up an e-store for you to digitally marketing it to boost your brand awareness amongst your target audience, CedCommerce is handholding your dreams throughout, during festive peak season and beyond.

Establishing Brand Loyalty

A loyal customer is what you have actually earned for life. Profits and popularity come and go but your loyal customers will not choose anybody else but just YOU! Numerous brands and start-ups fail because people are not willing to give up their trust in their old brands. This is where another prominent entry barrier comes into play.

By hooking your customers through emotional and psychological pain points you can succeed to address their issues and win their hearts.

High Capital Investment

The focus point here is ‘Investment’. Money is power if channelized in the right direction at right time. The high capital investment shows the best result when invested in modern technologies, advanced software, and the latest trend.

High Capital investment generates a capital barrier because; with the advanced and latest technology, the production increases at low costs. As a result, the rivals are pushed down from eating up the market share.

How CedCommerce can help you build great technical barriers to leave behind your competitors?

CedCommerce can help you build a great technical barrier for your competitors. CedCommerce provides integrations for multiple frameworks and marketplaces. Automating your product listing, order, and data syncing, shipping, and delivery details are all made easy. With other services like Checkout extensions; Shipping extensions, Marketing automation; and digital marketing services you can get an edge over your competitors in the technical part of your eCommerce selling.

In addition, with all automated and AI features, your manual effort becomes almost zero. As a result, it allows you to shift your focus to marketing and strategy building more intensively. A budget-friendly solution tailored as per your business needs enables smooth selling in the eCommerce arena.

To know more about CedCommerce and the right solution for your business, you can contact the experts anytime anywhere. The customer support team is available 24*7 to help and guide you at every step of your eCommerce selling journey.

We wish you a very smooth and profitable selling journey!