Help - competitor killing our business

[patientlady]

Just a thought, as these guys are buying from China then they will have a minimum delivery drop, most likely a container. By reducing the price they may just be trying to convert some stock into cash!

We do this all the time in our trade to receive retro on turnover...p/l

 

[imageonline]

geffb

So far you have had almost 1,000 views of this thread, we are dying to know what your product is, so why don't you have a 3 day special offer and reduce to competitors price, post your website details and maybe sell a few of this 'wonder' product?
If you insist on keeping it a secret, peeps on here cannot help and you will not increase sales. You have dropped the bait, now it's time to reel in the fish.
Just my thoughts.

 

[simbathedog]

It's impossible to offer precise advice without knowing what your product is, but quite simply, you need to identify your target market & tell them clearly why they should buy from you.
Cutting prices will put you on a slippery slope

 

[Jeff Knows]

What is stopping you from also selling their product?

EDIT: Nevermind, idea has been proposed before in this thread. Damn me being late to the party!

EDIT2 - The Secondry Idea : Why not produce a video comparing both products? Devise a test in which theirs snaps, killing the operator and bringing plague to a third world country whereas yours is the tool God uses. (Ok, A little extreme but you get the idea. Make a video showing how crap theirs is)

 

[owenou]

do what your competitors do, bring your product from China. Find a manufacturer in there, you'll cut your costs considerably so you can compete on price.

Definitely, u r right...
Maybe you could import some from China and sell them to check whether it is well sell.
Then if it is good, why don't you import them directly not do produce it? If i were you, i will found one trade company and sell your products by importing from China. There are so many products in China. You dont need to produce by yourself, for their price is much better than you. To be a trader is a good choice!
If it is not good, you should think the reason why your competitor could do while you fail to do it. To spy your competitor to get the answer you want! I don't know what the product is. However, i advice you that maybe you could do some differences on the outlook of product to make it easily spot.

 

[dagaul101]

For one I would cut the price but not as much as your competitor, and let them know why your product should be bought as it is made in the UK (people appreciate little nuggets like that)

 

[jj251006271]

I am a chinese ,my name is Jun.Hope you can make it .

Personally,i think the low price is not all the thing a buyer considered.

Also the quality.

As you said,your products are different from your competetiors and also from different orgine place. You need not to cut down your price.

Note your difference and advantage of your products,i think it will work.

Hope it can help.

Jun CHOU
Skype:jj251006

 

[rich998]

If you start importing a similar quality item from China, than you will have to re-think everything. You obviously believe in your product which is very important. As others have said, market the 'Made In GB', but you also need to make sure you are better than your competition.

By this I mean make sure you are customer friendly. Support your customers, communicate effectively and you will have to take a hit from time-to-time - be willing to make a loss in the short term to make a gain in the long term. Your competition won't be able to offer this as their product won't allow it. This is your advantage over them. Use it.

 

[directmarketingadvice]

Funny, the thing in the original post that stood out most to me was:

We have one small council tender, our competitors have hundreds.

(Funny in the sense that no-one else seemed to think it was important)

Roughly what percentage of their business comes from these tenders?

Steve

 

[BusinessRookie]

Solution:

COPY THEIR PRODUCT

If they have first copied your product and produced a cheaper, inferior item that is selling much more than yours, then what is stopping you from doing the same?

Product A: Cheaper, Chinese made item, lower margin, aimed at competitors target market
Product B: Made in GB, better quality, better finish, higher priced item.

Product A would directly target your competitors market and thus, reduce their market share.
Product B would be your existing business

Product A £19.99
Product B £49.99 (for example)

Alan Sugar talks about this pricing approach a lot in his book and said how because he offered two products (one perceived to be better than the other) then he rarely sold the lower model, because people always wanted to "upgrade" to the other.

Can you directly copy their business model and produce the same inferior product?

 

[FitnessSolutions]

Firstly, I would like to back up Strechy's comments in regards to Advertising.

As mentioned previously, you definately cannot drop your prices.

I would emphasize on highlighting the benefits and difference of your product. This will be key when you do sales pitches to companies ect.

In regards to advertising, many people think they can just throw money at it and it will look after itself.

Advertising is all about distributing to as many prospects that match your typical customers.

 

[FitnessSolutions]

Solution:

COPY THEIR PRODUCT

If they have first copied your product and produced a cheaper, inferior item that is selling much more than yours, then what is stopping you from doing the same?

Product A: Cheaper, Chinese made item, lower margin, aimed at competitors target market
Product B: Made in GB, better quality, better finish, higher priced item.

Product A would directly target your competitors market and thus, reduce their market share.
Product B would be your existing business

Product A £19.99
Product B £49.99 (for example)

Alan Sugar talks about this pricing approach a lot in his book and said how because he offered two products (one perceived to be better than the other) then he rarely sold the lower model, because people always wanted to "upgrade" to the other.

Can you directly copy their business model and produce the same inferior product?

I am not too sure about this as a long term solution as you are effectively degrading the quality associated with your brand

 

[IndiCafe]

Many large companies sell their product, many councils use it. I phone businesses constantly trying to get them to choose a uk product over a chinese import - that I can match on price - and better , but they aren't interested in us, only the competitor - because they are a bigger company.

Step 1, analyse. What is really the problem? The root cause.
Step 2, come up with solution options.
Step 3, pick one
Step 4, implement
Step 4, monitor adjust and control, then loop back to Step 1.

Trying things like price increases, reductions, more advertising, changing your product etc... no offense but doesn't it all seem a bit headless-chicken? Its jumping straight to steps 2 and 3 - and solving the wrong problem.

Based on what you've said above, the problem may actually have little to do with features, quality or price... just buyer confidence.
Because many other councils use the competitor product, and because its a big supplier, this gives a lazy buyer more confidence in that product than in yours. The Halo Effect. You need to drill down and find out what the buyers are really thinking... and that will be the clue to why they are not buying your product.

For example, being a bigger company doesn't in itself make your competitor more appealing. What is it about their size that makes them more appealing than you? Are the council buyers afraid that you may disappear in a few years, so they would have no after-sales support for the product so would end up with a worse product in the long term? If so, address that somehow.

Maybe its nothing to do with confidence. But you will only ever find out if you start understanding your customers rather than trying to push your product.

 

[SamStones]

Is your competitor selling other products as well as your product?

I'm going to say something controversial here, it's up to you to make of it what you will...

You have already said your cost is the same as importing from China. If you lower your price you can compete directly with them. You won't make as much on each sale, but with the increase in sales you may well make the same money as you are doing currently.

If they're buying it in from China they will have a Minimum Order Quantity (MOQ) as has already been said, you, however produce it in the UK. When ordering from China they will have a wait of approximately 12 weeks from placing the order to receiving the goods, this means their money is tied up for longer on each sale (compared to your product which is/can be in continuous production), this directly affects their Return on Investment (ROI). If you can price the item low enough for long enough, they may find that their ROI becomes so low it's no longer worth stocking the garden widget and would be better putting their money in one of their other products.

I hope this makes sense? Basically, by pricing the product at the same as theirs you can offer a better product at the same price, made in Britain and still get a better ROI than they will.

I did say this was controversial and won't work for everyone, but if your competitor is selling other goods as well you may just make it.

HTH

 

[Jeff Knows]

The problem with lowering their prices is that there is no evidence to suggest the competitor can't lower their prices. Then he has no where to go, making less money and looks like a fool putting prices back up.

Keep prices where they are I say.

 

[SamStones]

The problem with lowering their prices is that there is no evidence to suggest the competitor can't lower their prices. Then he has no where to go, making less money and looks like a fool putting prices back up.

Keep prices where they are I say.

This depends on what price they're getting them at from China, there's a price at which they just can't be made, but the op seemed pretty sure they knew what ball park their competitor was paying.

As I said, it was a controvesial statement, and one that would rely on a number of things falling into place in sequence, least not the notion that their competitor understands ROI!

 

The problem with lowering their prices is that there is no evidence to suggest the competitor can't lower their prices. Then he has no where to go, making less money and looks like a fool putting prices back up.

Keep prices where they are I say.

Looking like a fool is an occupational hazard which only a fool sould be concerned about.

Most retailers put there prices up and down like a yoyo.

No problem with a bit of experimentation is there peeps Tesco et al do it all the time..

Earl

 

[andrew.sanders]

Why not contact your competitors supplier - you may be able to buy the same product in as well!!

 

[Kernowman]

One of my friends imports and sells new valve hi-fi components like CD players and amplifiers from China, made to his own specifications. Outwardly, they appear the same as can be bought off Ebay for less than half the price and to the man on a galloping horse they look absolutely identical with the same casework, knobs and valve complement as the cheaper chinese brand.

Of course the hi-fi forums are abuzz with gossip of why anyone in their right mind would effectively pay double the price for what they PERCEIVE to be exactly the same product, apart from the screen printed name on the front.

However, the chinese components only have 220v transformers which have a short shelf life themselves, the higher UK mains voltage differences significantly reduce the valve life by overdriving them and it is not unknown for them to catch fire. If then the chinese one develops a fault, it means a two-way trip back to china to get it fixed at around £200 or more, being without your hi-fi for weeks on end, plus no guarantee when it returns it will last any longer the second time around because the same value of components will still be used in the repair.

However, my friend offers better rated transformers, a full 24/7 UK back up service, instantly sends out new valves if they fail and his repairs are turned around in less than a week. His components also sound much better because they are better by design.

The story within that story then is your competitors are not really your competitors provided there are clear reasons why your products are more expensive. It is your task to "educate" your target audience that "cheap" may have many pitfalls they were unaware of.

We bought a "cheap" food processor a few weeks ago and it is knackered after using it only twice, so what exactly did we save? :redface:

 

[paulears]

The simple solution - well not maybe a solution is to source a few of the cheaper versions for yourself, and do the comparison. Pull them apart, highlight in a nice way the potential problems and make both available. Call one the budget version and the other the British superior product. Give your customers the choice - if they want the cheap product, then supply it and keep the percentage of the business you would have lost to the other firm. You may well find that given the choice, people can see the difference. Tesco have unbranded toasters sitting next door to Morphy Richards at double the price - when people see both, then they can judge. Those that just want a present for somebody else buy the cheapo product because they don't need the benefits of the more expensive one.

Price in some circumstances really is the breaker - but not if you too have the options.

If you discover you make the same margin or more on the Chinese ones, then you have a difficult moral choice to make, but no decision at all on a business front!

 

[northwestlondonproperty]

Having read this thread with interest I'd like to ask geoffb about a point he mentioned earlier.
He stated that even if he price matched, the Council in question would still purchase from his competitor, possibly because they were bigger!! If the buyer has acknowledged that your product is superior then the objection is the size of your company and not price.
What's wrong with the size of your company? What do they need from their supplier?
But most importantly,
What is your rapport like with the buyer? Have you ever met him/her?
If the price is the same and your product is superior how can the buyer go to your competitor?
Get in front of the buyer (take out to lunch/invite to workshop if permitted),
find out why, solve that problem, offer solution, ask the question "if we do xyz, will you buy from us? If 'yes' - away you go, if 'no' - then you'll really find out why - and you may be kicking yourself....?

 

[northwestlondonproperty]

Having read this thread with interest I'd like to ask geoffb about a point he made earlier.
He said that even if he price-matched, the Council would still buy from the competitor, as they were a bigger company!!
This tells me that the objection is not price. If the buyer has acknowledged that your product is superior how can they still buy from your competitor if the price is the same?
There is another objection.
What is your rapport like with the buyer? Have you ever met him/her?
Take them out to lunch/invite to workshop/get in front of them somewhow - find the objection, solve the problem, ask the question 'if we do xyz, will you order through us?', if 'yes' - away you go, if 'no' then you'll find out why - and you may end up kicking yourself...?
Am I anywhere near the mark?

 

[Chris Ashdown]

As said you need to point out your USP's to your customers and also point out compeditors failings

BUT, BUT, BUT

You can also over do the knocking of the competition which can put people off, which is why most companies do not directly knock the competition

If you could get some editorial press is say the sunday papers or supliments then you would see big sales improvements

Look at the bigger picture, why are your products not in every garden centre, if you try and they refuse they will answer the question as to why, which you can modify for next time. Remember these will sell thousands not tens a week

I would say go with the suggestion of a good advertiser/copywriter, spend the £1000 on adwords with a PPC expert and send free samples out to all known gardeners who do TV or the press

Stop worrying about the competition spend the time on improving your sales

Two or three images are far better than overloading a site with similar images which will just make people move away with a click