If you find yourself in a very competitive market, without setting yourself apart from others, you will rather sooner than later find that your only leverage is to compete on price. That is fine if you do it on purpose.
But here is how I find most of my clients.
Margins are low to start with. That is a self-regulating mechanism in a crowded niche. It’s normal.
To counter the small margins, you have to sell more items. And how do you sell more if you don’t differentiate yourself from competition? Make a special offer. You choose some products and go as low as possible. Sometimes even lower.
But that is unsustainable long term. You only manage short bursts from time to time. You hope, you can win the hearts of your customers. But you don’t. You just set another level of expectation. So does your competition.
It’s the perfect procedure to teach customers that lower prices are possible. That’s irreversible.
This has been done so often, that people have learned to hunt for offers. They expect low prices now. And you helped set this low price point.
Congrats! You just earned yourself a name on a price-comparison website.
