For anyone who has completed research regarding e-commerce, there are some common catch phrases that we all come across. ‘Competition Analysis’ is one of those catch phrases. Competition Analysis is part of the business plan. And it is an important part.

However, completing some of the tasks that are required for Competition Analysis can be overwhelming and expensive. This is a disadvantage for e-commerce startups with limited budgets.

The following is a suggestion that has worked for us at Rothline Entertainment, an e-commerce site located at http://www.rothline.com. After reviewing information on completing Competition Analysis, we immediately knew we could not afford to have an outside source complete these tasks. We were also overwhelmed with the idea of attempting to complete the tasks ourselves.

We brainstormed regarding who our competition is and how well they are doing. One of the free tools that helped us the most with Competition Analysis was http://www.alexa.com/site/ds/top_500.

This site allows searching for e-commerce sites in specific industries in order to view status, link popularity, ranking, etc. For our company we began by selecting five companies that best fit our industry and were in the top 500. We took a look at what they were doing, and they must be doing something right if they are in the top 500.

We made a list of their strengths and weaknesses and compared our strengths and weaknesses to theirs. This was the best free Competition Analysis tool we had come across. It provided information on our competition and allowed us to begin carving out what our special niche could be and how to compete. The only thing that it cost was time.

For a startup e-commerce site with a limited budget I recommend trying this approach for Competition Analysis. This approach does not have to be your only tool but it can be a beneficial tool to add to your marketing toolbox.