Competition is involved with any business. Even if you make your own, unique product, similar products will compete against yours. But existence of competition is not necessarily bad. The fact that online retailers are selling items similar or identical to your own means that people want your product. Competition is only bad for you when market is becoming saturated.

Check electronics market for a good example. Electronics go for rock-bottom prices online because there are so many stores that sell them. The difference in prices between stores often comes down to cost of shipping. Competition in this area is extreme. Electronics dealers depend on volume, and very good suppliers, to make their money. Small retailers cannot sell at those prices and turn a profit.

In order to be successful it is essential that you know what you’re up against. If you are selecting your products, then you need to know which stores already sell those products. You need to know how many stores there are, how much they are charging and, if you can find out, how well they are doing. Could you sell for less (if only a little)? What are other ways you could differentiate your store?

If you already have your product, then you need to know where and how your competitors are advertising. Are they concentrated in one location? Are there good places that they have overlooked? How much is it going to cost to compete with them for prime ad space?

So where do you begin? The answer is Overture. Owned by Yahoo, Overture is one of largest pay-per-click advertising services. What you need for research are two tools in Overture Advertiser Center. The first is Search Term Suggestion Tool. This tool allows you to look up a keyword, like “digital camera”, and find out how many searches there were for that term last month. The tool will also suggest a list of related terms, like “digital camera review”.

The number of searches per term comes from Overture’s partners like Yahoo, MSN, AltaVista, CNN, etc. This is critical information because it tells you whether or not people are looking for your product online and, at same time, shows you how they are searching for it. This indicates a certain interest for your product. You may be able to judge amount of interest by number of searches for your terms. For example:

Digital Camera – 1,337,422 (high interest) Used Car – 890,346 Mountain Bike – 133,553 Blender – 26,648 Bubble Gum Machine – 1,502 Chapstick Raspberry Vanilla – 25 (very low interest)

Tip: Users searching for ‘digital camera’ are not necessarily shopping for one. They may just want information.

Also: If people are searching on Yahoo and MSN, then you can bet that even more people are searching for same things on Google.

The key to success of e-commerce is in combination of power of viral marketing, permission marketing and one to one marketing.

Have you ever heard of Amazon.com, Bluemountain Cards, or Hotmail? Of course you have! Why? Because all use varying degrees of above mentioned marketing techniques. In particular, they use viral marketing.

How can you use viral marketing?

With referral scripts!

First of all, you need to make sure that your ezine has a referral, 'Tell a Friend' link in each and every issue. You can say something like:

"If you enjoy our newsletter a think a friend might also benefit from it, please click here."

or

"Please help us share our message with others by telling a friend. It's easy, just click here."