Don’t Become Obsessed With The Competition.

So, in our first proper post i thought i’d boldly start by demolishing a pillar, and one of  the core accepted wisdom’s, of not just online selling but selling in general.

Here it is:

Always looking at what the competition is doing.

Well, i hate to break it to you, but stop. Right now. Don’t do it.  Step away from endlessly clicking on your competitor’s stores and sites to see what they’re doing.

It’s not good for you or your business and it’s destructive and counter productive.

This seems to go against both sensible business awareness and natural curiosity, but bear with me. There is method in my madness. Here are some questions i get asked regularly by clients in relation to competitors:

  • Why Are They Selling So Cheap – Can’t understand how a competitor sells an item so cheaply.

  • They’re Copying My Listings & Pack Offers – A competitor seems to be copying everything you’re doing.

  • They Must Be Scamming The Post System – Postage costs are nowhere near correct.

  • Where Is Their Stock Coming From – They appear to have stock you can’t get hold of.

  • Should I Change My Prices & Repricer Settings – You want to lower your prices to match them

  • I’m Going To Lose Sales– Your competitors actions will impact on your own sales.

These are all perfectly valid questions and salespeople naturally want to protect the sales they have as well as build new sales. However it’s simply not good for your business and indeed your own health to constantly be focusing and worrying about what others are doing. It’s a cliche i know but you can only control what you do and not what THEY are doing.

Let’s have a look at these questions in more detail.

  • Why Are They Selling So Cheap

  • There’s a myriad of different reasons why your competition could be cheaper than you. They may be buying better. They may have decided on a lower margin to sustain their business. They may even have decided to target you and simply undercut you.

    Don’t try and figure out why. It’ll drive you crazy.

    You’re only in control of what you do not what THEY do

  • They’re Copying My Listings & Pack Offers

  • Well that must mean you’re doing something right. You’re being seen, your sites are being noticed. That’s a good thing. You can’t stop them from seeing your site. Cliche time again, imitation is the sincerest form of flattery.

    Look at their pack offers. Have they got a product or pack selling well that you haven’t? Copy it, or change it slightly, add your own spin on it. If they’re selling lower than your margin don’t match it. You have your margin to make. Let them give it away. Stick to your price guns. You don’t want to become the classic busy fool.

    You’re only in control of what you do not what THEY do.

  • They Must Be Scamming The Post System

  • Maybe they are. It happens a lot. Some sellers put an item through their Royal Mail order as a large letter (mailing cost approx £0.65) when it should be a parcel (mailing cost approx £1.90) in the hope Royal Mail won’t check.

    They may get away with it many times. But they will get caught and when they do they’ll be watched closely. Whilst Royal Mail’s delivery service is not always the most reliable their Revenue Protection department who police this kind of thing are.

    It’s not worth the risk. Do it properly and correctly. It’s the only way to run an online business.

    You’re only in control of what you do not what THEY do.

  • Where Is Their Stock Coming From?

  • Are they buying from the same supplier as you? If so speak to the supplier. Are there better deals to be had? Can you get discounts for buying larger quantities?

    If you’re sure they’re not buying from your supplier phone the manufacturer, see who else distributes their products or see if you can buy direct from the manufacturer.

    It may be that they’ve lowered their margin but don’t worry about that. That’s their problems. Bills still need to be paid. You have a target margin for a reason. Stick to it.

    You’re only in control of what you do not what THEY do.

  • Should I Change My Prices & Repricer Settings?

  • That’s a decision only you can make. However i’m a firm believer in not simply reacting to what others are doing. Concentrate on your business and its aims. No one wins in a price war apart from the consumer. They may be cheaper than you on this item but concentrate on other lines. Price doesn’t always matter, service is just important. Is your shipping offer more attractive? Is your feedback rating higher than theirs?

    You’re only in control of what you do not what THEY do.

  • I’m Going To Lose Sales.

  • There’s many reasons why some days your sales may go down. Some clients report Wednesday as being unusually slow, others Thursday. Don’t focus on individual daily sales, look at weekly, and more importantly, monthly sales.

    The crucial message is “don’t panic”. The market is huge and if you’re on eBay & Amazon you’re exposed to many millions of customers every day.

    You’re only in control of what you do not what THEY do.

Keep Doing What You’re Doing.

You’ll note my repetition above but it is THE point worth stressing. You’re only in control of what you do not what THEY do.

The online marketplaces are full of sellers who seem to be selling too cheap. Many don’t last that long, those that do are clearly working on incredibly thin margins and have a fragile business model.

My advice is always to stick to your plan – stick to the margins you need for your business to survive and thrive.

I’ll cover in a later post why i believe biggest isn’t always best (another accepted wisdom i’ll seek to break down) and that there are great business opportunities for sellers who seek to maximise margin at the expense of higher sales.

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