In a simple language of expression, e-commerce means putting details of your products online for customers to find, compare, decide, and buy. So, from the onset, it’s not a complicated task. And it becomes even more interesting because you do not have to sell your own products thanks to the likes of Amazon (Nasdaq: AMZN).

However, according to OWDT a web development company from Houston that has helped create several e-commerce platforms for various businesses, it’s not always as simple as it sounds. In fact, it is far more complicated than most can care to imagine. And that’s why most businesses fail to make their mark online.

When it comes to the e-commerce marketplace, startups must be as distinctive as possible if they want to be successful, notes OWDT. It is about identifying a gap and filling it with the best in class products, and the e-commerce website developed with specialization in mind.

Some of the e-commerce startups have already embraced this requirement as they focus on a specific group of customers, which at times can also be from a specific location.

Let me use this Bikerringshop as an example to demonstrate what a target niche market means in the e-commerce marketplace. This is an e-commerce startup set up to target the Motorcycle community. And in such a case you would expect to find a biker ring listed as one of their products alongside other motorcycle-rider related accessories such as wallet chains.

The focus on the target market must be very specific if you are looking to compete with the likes of eBay (Nasdaq: EBAY), Target (NYSE: TGT), and Amazon, among others.

Specialization ties a business to an identified market segment, and in return, it builds loyalty with its customers. This is the biggest strength for any e-commerce startup looking to battle out with industry leaders.

On the other hand, market giants like Amazon and eBay can count on the trust built over the years. This promises more security, as well as, a wide choice of comparable products from competing sellers. And given the types of e-commerce scams in the market, startups have a huge task of out mastering the status quo.

Take, for instance, the example above. You can easily find some of the products sold by the biker ring shop on the main giant e-commerce platforms in the U.S., eBay, and Amazon—and the chances are that there will be multiple sellers. However, the probability of you finding a certain set of products say, a biker ring, wallet chains, a belt and a custom biker pendant is slim.

But on a bikers' products e-commerce platform like the biker ring shop, chances are products will be available in matching sets. It’s all about customization for these startup e-commerce platforms, and without it, they are most likely doomed.

As this Forbes article points out, specialization is the key to profitability for startups. In fact, companies like Amazon started out by disrupting the book rental market and since then, it has grown to be the largest e-commerce player in the market. The likes of Barnes & Noble (NYSE: BKS) and Pearson PLC (NYSE: PSO) have struggled to catch up despite being among veterans in the online book rental services market.

The small players have the flexibility required to come up with products that target certain customers. Large players like Target, eBay and Amazon do not have this luxury. In fact, for some of the companies, it all boils down to the various sellers listing products on their platforms. They have no control of that and it makes things tricky for them when it comes to customization.

The giant players also must keep shareholders happy by constantly producing impressive quarterly and annual results, so their perspective is a lot wider.

Conclusion

The e-commerce market is one of the most compelling areas to invest, but there are barriers that some startups seem to ignore. For those that pay a close attention to specialization, chances of mixing up with the other giants in the stock market increase tremendously.

Right now, e-commerce startups like Chewy.com, Casper, and Stitch Fix are tipped to go public in the near future while the likes of Etsy (Nasdaq: ETSY) and Shopify (NYSE: SHOP) have already demonstrated their success following their IPOs barely two years ago.