Traffic increases, orders decrease, what is the deal?

[iloveu]

My site is selling electronic accessories. It is in the industry that has most fierced price competition due to similar products and standard specifications. My price is much higher than my competitors and we mostly depend on traffic from organic search from Google, Yahoo and MSN. Since the end of September, our commited orders dropped considerably. I check the traffic, the volume of unique visitors keeps growing. The whole site works normally, I don't know the exact reason on the slow-down. We don't want to cut down the price so we launch some promotions to offer customers free shipping on 2nd items, but it does not help too much. How about you guy's sales? Do I have to slam down my price finally to counter those cheap postings, especially postings from Ebay?

[Raymond]

Why don't you lower your price for at least a week to see if it has any measurable impact on your conversion.

[Terabytes]

Just remember that it only takes 1 click to check your competitors price....(IMHO) I don't believe anyone really cares where they purchase a product, they want the best deal.

It's just too easy to check the product elsewhere and compare prices. If you had a widget for sale for $10.00 and someone else had the exact same widget for sale for $5.00, where do you suppose they will purchase the widget? (where would you purchase it?)

If you don't have the best deal, they will move on...

just my 2-cents

Tera

[etechsupport]

I would suggest you should offer some contest or gift scheme etc to attract your customers rather than decreasing price. You should also implement few changes in your site by benchmarking it with other legitimate competitors.

[Raymond]

If he has been pricing his goods higher than everybody else, and has been doing fine, I see no particular reason why the price has anything to do with the sudden drop in conversion.

But it doesn't hurt to try and lower your price to find out.

[etechsupport]

Lowering price sometime indicates lower in quality. I think it all depends that actually with whom you're going to compete with. However price should be rational and competitive with parallel company.

[sem4u]

Have more competitors started selling your product? This could be the reason your sales are declining.

[iloveu]

Thanks for you guys' input. First, there are many many sites selling same or at least similar products as ours. Cutting price seems to be the most effective way to win more sales. Actually, I think cheap Ebay posting is my biggest competitor.

But since our commited orders are mostly from organic search, not from shopping portals (bizrate, pricegrabber), I think our customers is not so price-sensitive, so I don't want to lower my product too much. Moreover, I tried price cutting and other promotions before, it did not impact on my sales at all. Sometimes I suspect my slow-down sales is related with the whole economic environment or not. All in all, I am eager to find a good way to keep higher price in a price-killing industry and not to lose customers meanwhile.

[Staffa]

the whole economic environment

This will certainly have an influence since it is not going particularly well anywhere right now.
Also, add to that the coming run-up for Xmas, many people will have to balance their spending. Unless of course your widget makes a great gift ;o)