Comments on: What To Do If A Competing Business Undercuts You In Price

By: Magie

Magie — Sat, 12 May 2012 20:54:29 +0000

Hello,
I have a different problem. I have a service business (20 yrs) and recently one of MY accounts has opened a competing business, charging less, inferior product, copied my business name but added one extra word, copied all my forms tweaking them a bit and blanketing my area of business.

A few times I have to give her property that belongs to “my” accounts that I store so I must talk or email with her. She is overly sweet. When she asks for something it’s always followed by “have a great day!” w/ a smily face – or “wishing you the best!”. It makes me sick. I’m always short w/her but professional.

I feel like she’s walking all over me. I only lost a couple accts. and a couple have come back but this is driving me crazy! I want to unload on her – would this be a big mistake?

By: Hans

Hans — Fri, 09 Mar 2012 02:19:06 +0000

Thanks for your reply, Steve. I agree with your assessment. After doing a more in-depth price analysis and comparison with competing products, I’ve realized that we were already priced quite competitively (now I wish I had done that before posting here, lol). I did make a few adjustments nonetheless just to remove any doubts in my mind about our pricing, and also to give potential buyers additional incentive to try out our products. It’s clear to me now that traffic and marketing are at the heart of the issue. We’ll be trying to leverage a FB Page in combination with my wife’s blog for more traffic. Thanks again for commenting.

By: Steve

Steve — Thu, 08 Mar 2012 16:53:14 +0000

Hi Hans
I don’t think that you are at the point where you can definitively know that higher prices is your problem. In our store, we consistently charge higher prices for some of our goods and they still sell. More likely than not, you have a traffic problem. If no one is visiting your shop, it’s easy to come to the conclusion that your prices are too high. Have you tried driving targeted paid traffic to your site to see what your conversions look like?

By: Hans

Hans — Wed, 07 Mar 2012 08:38:58 +0000

Hi Steve, I found your blog about a week after the launch of our (my wife’s and mine) online store and I have been hooked to your brilliant blog ever since.

Here’s a question I’m struggling with at the moment: Our sales in the first month of selling baby care products (on an ecommerce portal in Taiwan) were rather disappointing (only a handful of orders and only one of them came directly through the website). And after having optimized our web content throughout the first month, we’ve come to the conclusion that the lack of sales is primarily due to (1) unfamiliarity of consumers with the brand we’re selling (2) our prices which are sometimes significantly higher than similar competing products and, to a lesser degree, (3) low traffic.

In our views, the main problem is our prices, which currently range between US$16 and $23 per item. The main competing brand is selling similar (though in our opinion slightly inferior) products for as much as $3-6 cheaper than us. It seems there’s no way around reducing our prices to a level closer to the competing brand and we’ve decided to take this as a next step.

Steve, do you think it’s better to slash all prices all at once or go product by product over a period of time and also make slashes in installments of $2 each time (note that so far we only have a dozen different products in our store).

Also, do you think it is advisable to keep a low profile and keep silent about the price changes or is this a good time to promote the price reduction to everyone and use it for marketing purposes? (I think the drawback could be that our credibility could suffer when potential buyers see that we were initially priced too high.)

As you can see, I’m a total noob, so I’d be thrilled to hear your thoughts on these newbie questions. Thx a lot!

By: Steve

Steve — Thu, 16 Sep 2010 14:01:54 +0000

@Jim
Well said and I don’t think anyone would disagree. Creating your own products is probably the best way to go when starting a business but may not be a good fit for everyone. The challenges of marketing your own product are greater than with a traditional store but the earning potential is incredible if you can pull it off.

By: Jim Juris

Jim Juris — Mon, 13 Sep 2010 16:57:11 +0000

I am a big believer in creating your own products. That way you can name your own price for the products that you have created.

I also strongly believe that you should test everything. That includes testing your product prices and sales material.

Selling informational products is great because once you have created the informational product, a website for selling the information, optimized your website for the search engines (SEO), and have a way to deliver the information immediately to the buyer of the informational product you are basically set up to run on auto pilot.

Your only job after you have set everything up properly is to market your product to your target market. This may sound simple but it does take time and effort.

By: Selling to Zebras Blog » Blog Archive » Complex Sales and Selling Strategies, Sixth Edition – February 15, 2010

Fri, 26 Feb 2010 21:09:02 +0000

[...] C presents What To Do If A Competing Business Undercuts You In Price posted at [...]

By: Craig Sutton

Craig Sutton — Fri, 12 Feb 2010 16:11:11 +0000

This is very wise, a knee jerk reaction is not the best course of action. Im a bit of a tinkerer myself and like to try things but they are always weighed against risk. If you already have a solid base of customers there is no reason to think they will suddenly move away, and the argument of quality over quanity is a good one as well.

First and foremost you have to understand who your customer is, the rest of the decisions are much easier one you are at ease with that.

By: Carla

Carla — Sun, 07 Feb 2010 21:04:44 +0000

Thanks Steve! Its growing slow and steady. There was a lot I had to learn in 2009 (especially SEO), but my efforts are paying off now. Its still not where I want it to be – not anywhere close, but at least improvements are seen every month.

By: Steve

Steve — Sun, 07 Feb 2010 20:24:31 +0000

@Steven
Thanks for the vote of confidence. I’m pretty sure that everything will turn out okay. After all, I’m sure this competitor has been undercutting our prices for some time now and I only just noticed recently.

@Carly
Glad the article helped. How has greenandchic been doing lately?