netmeg - 3:25 pm on Aug 3, 2012 (gmt 0)
There will ALWAYS be someone cheaper eventually. Always. So if price is your main selling point, you're probably just in it for the short term (whether you want to be or not)
I have clients who discount heavily in order to grab sales from competitors, and in fact just to get the customer in the door, because they have an extraordinarily high rate of return business. We can practically give the first couple orders away free if we wanted to.
But other clients who sell once and never hear from their customers again. They tried cheap, and that only worked for a while, and now they're trying bundling products.
I have no idea what you're selling or what kind of business plan (long or short term) you want to operate on, but a bunch of my clients are now leaning towards the Amazon subscription method of selling consumables. And if what they are selling isn't consumable (meaning it doesn't need to be re-ordered at some point) then they are looking at getting IN to consumables, or something of value they can bundle with the original product.
The Amazon subscription method, in case you haven't run across it - say you want to buy some vitamins or supplements, and the cost is $29.95. You can either buy the one bottle, or you can sign up to have them delivered at some increment of time (every thirty days, for example) and the bottle may only cost #24.95. There's no commitment, and you can cancel at any time. But a lot of people won't, and still other people appreciate the convenience. We're doing it with types of office supplies and some other products, and trying to figure out a way to do it with products that people normally don't buy more than once.
Our most profitable business (across most of my clients) is repeat business; more money, more brand equity, more everything. So that's what we throw ourselves into.