So, you run a small business, on the internet, in a market that is completely saturated and overflowing with competitors? Welcome to the club! Hopefully, you are not looking for pity but rather answers. Anybody selling anything on the internet is having a similar experience. There are literally no existing markets that are untapped. Unless you plan to create a new market (think Nintendo Wii versus Sony Playstation and Microsoft Xbox), you likely need to find a unique way to conquer the one you are already in. You may even routinely ask yourself, “How am I supposed to compete in such a fierce marketplace?” Your situation may even look a little, or a lot, like this:
- There are hundreds of companies selling the same products (often from the same source)
- My products are boring commodities that people “need” more than “want”
- Some of my competitors are corporations with mind-boggling budgets
- Some of my competitors are recognized brands (house-hold names)
- All of my competitors say they have the best customer service, best quality, and lowest possible prices
- Some of my competitors are selling for less than my cost
- Some of my competitors have a much larger selection of products
- Some of my competitors lack integrity and attempt to lie, cheat, and steal their way to the top
- My wholesaler/drop-shipper is now selling products direct to the consumer (sometimes below my cost)
- Some of my competitors have fancier websites (more resources)
- It seems like a few new competitors pop up every day
Welcome to the cold hard reality of running a real business. Nobody said it would be fair or easy. It can be difficult not to feel helpless, hopeless, and hapless after we paint such a bleak picture in our mind. However, it doesn’t have to be like this. First, you need to realize that hard work is required to succeed. There is no quick fix silver bullet answer to coming out on top. You will need to test many different approaches, measure the results, and continuously tweak. You will need to do those things that your competitors are unwilling to do. Most of all you need to realize that just because a competitor stands above you at the moment, does not mean they cannot be beat or that they know everything there is to know about your market.
Don’t wage war on price as it will likely run you out of business. Somebody probably has deeper pockets than you do. On the internet, it is best to be middle of the pack on price and top of the pack on points of difference. How can you add value to your products instead of discounting them? How can you enhance the customer experience (while shopping and consuming the product)? What can you do to stand out from the herd? Coming up with a legitimate unique selling proposition and points of difference is really hard work and hence the reason most companies skip this step altogether. The most successful companies never skip this step.
One of my favorite examples is the meteoric ascent of EAS and Body-for-LIFE. There is absolutely no shortage of competition in the nutritional supplements marketplace. Millions of people dream of losing weight or becoming a Greek Adonis; and most are willing to spend ridiculous sums of money attempting to make that dream a reality. When EAS began selling nutritional supplements, they didn’t try to be the cheapest or the fanciest. What they did was provide mountains of free educational material on eating healthy, exercise, and supplementation. The information was backed by experts and science.
They told customers that they could achieve such amazing results with or without their supplements and they told them how. They simply stated it would be easier with supplements than without; mostly based on convenience. They built such strong loyalty, almost a cult-like following, that their tribe often purchased their products without even looking at what the competition was doing. They were transparent in their actions and garnered the respect and trust of their customers. Unfortunately, both companies have new leadership and they took their eyes off the ball. While they vainly attempt to follow the same game-plan, their words and their actions are no longer in sync.
For another terrific example, see the following story – “But the Market is Too Competitive …”
What are some ways you have gone about value add?
Image Credit: davidChief