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How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.
When you are running your own retail store, or you're managing one, you know that pricing can be a big factor on if you get the sale or not. With all the technology out there, people can price check while they're looking at a specific dress on your rack to what they see on their Amazon or Walmart app and decide if they want to make a purchase.
This has become a very big problem for business owners because they never know when they will be taken over by the big billion dollar corporations or simply pushed aside.
Now if you're running your own store, you can't usually compete with the big corporations pricing because they buy in such bulk that they get the lowest possible pricing, but there is a way to fight back. This works for almost any niche too
In this discussion I will go over how you can compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.
1. Give your customers the power in how much they want to pay
Tier pricing is something that works for any type of business, usually. This is when you give someone a few options on what they want to pay, which are basically membership levels if you think about it. This doesn't just work with digital products, it can work for physical items as well.
You can bundle your pricing or let someone pay month to month, that's just 2 options for 1 product or service. Netflix and Amazon both have services that allow you to pay monthly or annually, and it works well. Of course with the annual 1 time payment per year you get a slight discount, but most people won't want to drop that much money at one time which makes your profits higher over time because your monthly cost will accumulate more profits in the 12 months than the 1 time payment
This can be done with digital products, food baskets and basically anything someone can purchase.
2. Enticing Pricing
We've all seen it and we know what it's doing, but we fall for it time and time again. How many times have you gone to the store and seen a pack of gum for $2.00 and another one for $0.89? Almost every time I would assume, and you usually get the one for $0.89 because it's $0.11 cheaper. What if I told you that the $0.89 pack of gum doesn't make as much per sale compared to the $2.00 per pack, but sells 50x more packs each day?
Think about using enticing pricing the next time you set up a product or digital service I like to even use 5's and 7's at the end of my prices instead of 9's because almost everything has a 9
3. Price Matching
Now this won't work for every product, especially service based ones. This doesn't work for services like SEO and Web Design because no two service providers are the same. I can't compete with someone in India charging $200 while I'm charging $1000. This is why price matching doesn't always work, but it can if you're in the right niche.
If you're already getting your products for a low cost, you can usually price match in order to get a sale. This is because the bigger stores will always make a profit on items, so you can price your item the same as theirs and make the sale. Of course you won't make the same amount of money per sale due to the big corporations purchasing in bulk, but there should still be some meat on the bone for you. And look at the bright side, you just gained another customer who you gave a price match to who will likely come back and possibly share your website with friends and family
4. Use discounted or lower prices for membership sign ups
This is a method not used by many companies, but there are 2 who do it well. Have you ever heard of Costco or SamsClub? They do this extremely well and barely advertise. Their main source of traffic is word of mouth and their email updates to their own subscribers. People always ask "How much did that cost you?" and when they're amazed at the price, the ask "Well where did you get it?!?!?!" and that's how they gain additional clients lol
Businesses that do this will usually see a slow and steady increase in customers over time. This trick works with digital and physical products across the board
There are likely a few more ways you can compete with big billion dollar companies in a pricing war, but these are the few I use when I'm in the same niche as them I actually try to avoid competition with websites like Walmart.com, Target.com, CostCo.com etc. but it's difficult to do since they offer so many products and services.
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