How do you deal with competition (low prices)

I would like to hear your experience and your opinion

How do you deal with competition online

In my field we sell a product that we produce
We dont sell the exactly same product (it is for home decor)

So how do you deal with copetitors lowering their prices and try to look that you are expensive?

 

There will always be competitors who will undercut your prices. This is normal in the business world. But one important thing to remember is that if people only based their purchase decision on the price factor, then we wouldn't have mortar and brick stores as in most cases online shops have lower prices.

When it comes to online shopping you might find a scarf on Aliexpress for $7.99 but the shipping takes 2+ weeks. You can buy the same scarf from another online store for $15.99 but the shipping takes 2-3 days. Some people will buy it from the more expensive store as the shipping is faster. The most important thing is to differentiate yourself from the competitors. In this case it could be something that justifies that you have more expensive prices. For example, shipping time will be something that people will take into account. If you can offer a fast shipping time
people will be more willing to buy from you. Some merchants offer free shipping to be competitive. You could also offer an extended warranty or money back guarantee.

There are also situations where a number of online shops sell a product with the same brand. Let's say that they sell a generic car stereo with the brand X. In the beginning they all sell it for around $100. Later on, one of the shops manage to find a cheaper supplier which enables it to sell the stereo for a lower price. So this shop starts to sell the stereo for $79. Situations like this can be tough for the other sellers. But one solution could be to rebrand the stereo and give it a nicer packaging. This will not only give you an opportunity to keep the same price, but it will also differentiate you from the other shops and their undercutting strategies. If you rebrand the product people will not be able to compare you to the others as you are selling a unique product. If you sold it with the same generic brand, there is a chance that people would choose the cheaper shop because they will shop around and compare the prices.

 

Low price
Good quality
Good service

Pick any TWO, you CANNOT have all THREE!

There is your solution. Focus on quality and service and people WILL pay a higher price. I do it every day. I have a reputation for having some of the highest prices in my field, but I still convert about 1/3 of my contacts and have been doing so for 40 years.

 

What dollar difference are we talking about?

 

If you can not lower the price,

you gotta find other ways like:

Better Design

Excellent Quality

Unique Product Culture

One Word, there is must be a reason why customers will choose your product instead of others.

 

One thing i would not do is get into a price war, Give a good service with good value.

J

 

I like your response to the OP's question, and would like to add a comment about rebranding, otherwise known as private labeling.

The advice I most often see about private labeling is "Slap on a sticker." Although that is rebranding, and to some extent differentiating, it is only a half-hearted approach that doesn't get the greatest results. There might be 5 or 50 brands and that label just adds to the number.

I have taught many people how to create a great brand, rather than just another brand.(Brand #51?) The choice of what type of label and packaging to use can make or break a brand. The right label can convey a subtle advertising message that not only shows that the product is a good one, but that it is the product the buyer must have. Sellers need to put themselves in the customers' shoes - actually into their heads. They need to think what benefits they are offering by supplying that product.

There are a lot of labeling ideas set out on my website, and a look at those might give some help to those who want to learn how to present their product in the most effective way possible.

Walter Hay

 

and what if with not discounted prices and competitive prices you dont get conversion and no sales and just spending your money on ads???

Anyone could answer this post

 

Well let them and focus on deliverering the best value to your clients .Even if your price its a little lower people will apreciate you more if you add more value to your products .In the future you will be the winner

 

I recently bought a printer online and it came to the door of my third floor apartment (no elevator) in 2 days. That was great service and I was very happy and I would buy from them again, and recommend them to anyone. Buying was easy and the service was fantastic.

Provide better service and support and you will win customers.

Those who want the cheapest will never buy from you anyway so forget about them. Focus on people who are willing and even happy to pay a bit more for good service.

 

That's an interesting talk.
We are a heavy discounter in our industry but are yet to have a single customer that stays with us because of the price.
They get interested because of the price but do stay because of how we treat them and the knowledge we share with them to help them accelerate their growth.
Of course, reliable and fast service is a must.
I will side with @mmerlinn on the second paragraph of his post, focus on quality and service, and will only add - always provide more than the customer expects. But I beg to differ on the first part. While it's true 99% of the times, it is not written in stone, and affordable (or even dirt cheap) services can be good. You just have to take your time when you look for them.

So yeah, provide better experience, try to be there for your customers and create a conversation. It is the right thing to do.