How to Identify the Right Competitors in E-commerce? A Practical Guide for Online Store Managers

Competitive price intelligence is one of the most valuable tools in e-commerce pricing management. It enables fast reactions to market changes—especially when monitoring is automated. But “tracking prices” alone is not enough. The real key is understanding which competing online stores actually influence your sales, so you avoid costly mistakes in your pricing strategy.

This article focuses specifically on competing online retailers (e-commerce stores)—not manufacturers, offline retailers, or marketplaces as platforms. The goal is to identify the online shops that genuinely win customers away from you at the moment of comparison.

The Trap of Misidentifying Competitors

A common mistake is monitoring online stores that are not real threats to your business. If you match or undercut the lowest price of a seller who does not actually take customers from you, you sacrifice margin unnecessarily—while your sales might have stayed stable even at a higher price.

Why a “cheaper online store” may not be a real competitor

Low price does not always translate into conversions. In e-commerce, customers often choose the store that offers the best overall buying experience—not just the cheapest offer. Here are frequent reasons why a cheaper shop may still lose:

• Friction in the checkout process

  Complicated payment flows, forced account creation, or missing popular payment methods can significantly reduce conversion.

• Hidden costs (sticker shock)

  High shipping fees or extra charges revealed only at the end of checkout often cause cart abandonment and push customers toward more transparent stores.

• Slow delivery times

  Modern customers expect fast shipping. A cheaper offer with a long lead time often loses to a slightly more expensive offer delivered within 24–48 hours.

• Poor mobile experience

  If a competitor’s site performs badly on mobile, customers will abandon the purchase—even if the price looks attractive.

• Weak product content and low trust

  Thin product descriptions, missing reviews, and limited credibility signals make customers willing to pay more elsewhere for confidence and safety.

Methods to Identify the Right Competitors Online Stores That Truly Matter

To accurately identify online retailers that realistically pull customers away from you, combine multiple analytical approaches:

1) Traffic and visibility analysis

Tools like SimilarWeb can help estimate the relative popularity of a domain. Also look at Google Shopping visibility—stores with strong exposure in this channel are often your most direct competitors, particularly in price-sensitive categories.

2) Marketplace signals as an indicator of seller strength

If competing online stores also sell on Amazon or eBay, their marketplace performance can provide a useful signal of scale and demand. For Amazon, tools like Jungle Scout are commonly used to estimate sales volume and seller momentum.

3) Review count and review growth rate

Reviews are a practical proxy for demand. Tracking the volume and growth rate of ratings and reviews can help you identify which competitors are accelerating—and likely taking share in your category.

4) Historical analysis and price elasticity (the most reliable approach)

The most meaningful method is also the hardest: measuring whether competitor price moves correlate with your sales changes.

For example: if a specific competing online store drops its price and you consistently see a decline in your sales shortly after, that store is likely a true competitor with measurable impact.

Context Matters: Channel and Category

Your competitive set can change depending on:

• the sales channel (your own store vs. marketplaces),

• the product category and price segment,

• the competitor’s assortment specialization.

Many online stores are strong only in a narrow niche (e.g., laptops only, or cosmetics only). That means they may be your competitors only within certain categories, not across your entire catalog. In practice, competitor lists should be built at a category or product group level, not as one universal list.

The Final Test: Pricing Experiments

The best way to confirm whether a specific online store is a true competitor is to run pricing experiments. This gives you the highest confidence because it connects pricing decisions directly to business outcomes.

In practical terms, you test:

• how changing your price relative to a given competitor affects your unit sales,

• how it affects margin and profit,

• whether you regain volume—or simply give away profit.

This approach helps you define a competitor monitoring set that protects profitability instead of fueling an unproductive “race to the bottom.”

Summary

Identifying competing online stores in e-commerce is an ongoing process. It should consider not only prices, but also the value proposition that competitors offer customers: fast delivery, easy returns, transparent costs, trust signals, mobile performance, and loyalty programs.

When you understand these factors, you can build a pricing strategy that protects margin—instead of reacting blindly to every low-priced seller on the market.