They have minimal marketing budgets. They don't typically buy in bulk. If they cut prices too steeply they might not be in business next year.
Small, independent retailers, many of them locally based, are often at risk of getting lost in the holiday shopping season, when major national chains all but dominate the airwaves with slick advertising and jaw-dropping deals.
Small businesses somehow persevere nonetheless, usually by forging a reputation for quality that they hope will distinguish them in the eyes of shoppers.
Steve Tibbs is in many ways a model of small business success. His company, Tibbs Beef Jerky, has been approved for sales in Walmart stores across the country — no small feat for a locally-owned business now in its third year of operation.
Tibbs knows he can't hope to compete on price alone. His solution: give out free samples at a Valley Plaza mall kiosk that is his sole location. By this time next year he hopes to have 50 employees stationed at 10 mall kiosks across the country, not including Walmarts.
Tibbs' success as an independent food manufacturer is by no means typical. But his special formula is, in its way, quite common. As he put it, his secret is "persistence, dedication and don't give up."
Special service counts
So it goes with small businesses. Unable to take on the big guys on price, they must set themselves apart in terms of reputation and execution. They need to win over one customer at a time, and make sure not to mess up what can become long-term relationships.
"Primarily it's bringing service," said Jay Thompson, lead business consultant at Cal State Bakersfield's Small Business Development Center.
For example, he said, if a customer shopping at a small business has a problem with a product, the expectation will be that the independent always goes out of its way to deliver unrivaled expertise.
After a while, he said, customers view the small business owner as a friend and advisor. It's a level of service and attention big-box retailers usually cannot muster.
"That's what we encourage our (small-business) clients, to build that type of relationships with their clients," Thompson said.
A recent survey by online marketplace Groupon found holiday shoppers tend to gravitate toward small businesses rather than major retailers. The reasons, according to the company, is that these businesses offer a unique selection and provide a more personalized customer experience — plus, money spent at these stores stays in the community.
There has been a focus on small businesses at this time every year since financial services company American Express launched Small Business Saturday amid the recession in 2010. The event is intended to bring attention to independent retailers whose existence can be easy to overlook at this time of year.
Marking the event this year, American Express released survey results suggesting 90 percent of U.S. consumers feel Small Business Saturday has had a positive impact on their community.
Being there for customers
Ed Tomlinson, owner of independently owned California Keyboards Music Center on Brundage Lane, said he offers a level of service large retailers generally cannot match. That's especially true when people shop online, he said.
"If you buy online and something breaks, or something goes wrong … you're not going to be packing (products) up and sending them to Amazon," he said.
Unlike many small businesses, California Keyboards does try to compete on price, or at least, it tries hard not get beat strictly on that basis. The store maintains a price guarantee against any price posted on the Internet.
The business works closely with local school band teachers and music students. The approach seems to be working: The store recently relocated to a space 20 percent larger than its former home. What's more, Tomlinson said sales are up 17 percent year over year.
Like Tibbs at the jerky company, the tip he offers speaks to the persistence small business owners cannot do without.
"Just do what you do and do it better than the other guy," he said, "and it comes back to you."