I run an ecommerce site that does about $60K a month in sales selling software. The site has been profitable and fairly steady for 2 years now.
My #1 competitor is Amazon.com. In the past I have always been at or slightly below their prices so there has not been a problem. Recently, however, their prices have been slashed so much I literally can't compete on price.
In attempt to stand out I offer a 30-Day Money back guarantee and ship everything 2-3 day Air. Amazon does not accept returns on software and ships via "Super Saver" which is double the shipping time. I belive I have done a good job of making our policies clear on my site.
What would you guys suggest I do to compete? Should I slash my prices yet again to an even smaller profit margin? I would then be closer to them in price but would not be able to match them. Should I put a comparision chart on my page? I heard this is not a good idea since you don't want to invite people to leave your site.
Any suggestions on how to compete with the "big boys" would be appreciated. These low margin sites with $5.00 above cost are killing me. Do I stand a chance?
Msg#: 3385398 posted 6:52 am on Jul 9, 2007 (gmt 0)
Try product dumping to raise the inventory cost of big players.
what does that mean?
What MSFT did with IE to Netscape ...
If you have big enough business but not big enough as big players, why not sell some products at break even price until all the competitors fold from that manufacturer. Just make money on other section of business.
Consider some immediate cost cutting measures such as using Google checkout which has no fees until '08 and if you don't already ship via USPS (if in the US) they are usually cheaper than UPS or Fedex.
Take a look at DHL too. Unlike UPS and FedEx, they don't have failing print/copy business to support.
>>but on the internet 99% of the time I already know what I want and I just want it at the lowest possible price
Depending on the product, that's fairly true. For a brand name piece of hardware or accessory, or camera, etc., I'll do some searching. I may not pick the dead lowest price if it's from a firm that isn't well-rated or that I never heard of, though. Nevertheless, I can almost always find (sometimes using the comparison shopping sites) an extremely competitive price from a firm I know or that has superb ratings.
Not all shoppers are as aggressive, of course, but if you get a lot of lookers and not many buyers, it could be a price thing.
One idea: if you haven't done so, find the Stanford Web Credibility Guidelines and see how your site measures up. Improving your score on those measures might give your close rate a boost.