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How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.



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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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.

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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.

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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.  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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.


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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.


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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.




In Conclusion:
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 How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.  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.



Remember to follow me How to compete in a pricing war with Amazon, Walmart, BestBuy, Costco, etc.
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Thanks!

Razzy

Comments

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kgord

I think you offered some excellent suggestions here, but lets be realistic, competing with the big retailers is something that is going to be difficult for any small time entrepreneurs. It is just one of the factors in today's world that we need to be aware of. It is business in today's world.



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Corzhens

When it is a battle between David and Goliath, so to speak, I don’t think it is wise for a small business to compete with a big business outfit particularly with the price. One Chinese businessman’s advice when you are small is to go along with the tide and try to be friends with everyone. Big companies can always crush you so never ever think of waging a war against them for you will regret it. There are success stories that have an opposite result on that advice but it is simply luck. Not everyone is lucky though.



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Tronia

Luckily I have never been in competition with the big boys but I can only imagine how hard it must be to get customers to buy your products versus the large names like Amazon. I mean I know that if I had the opportunity to pick if I want to buy from Amazon or an unknown company, I'd definitely pick the first option.

So due to that, it is important, like you've said, to make some extra effort to ATTRACT the buyers - whether it's with discounts, matching prices or something else, that's up to you.



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JoeMilford

This is good advice and a good post. I am competing with other publishers and other writers in two specific genres, so I am going to try to apply what you wrote here, in theory and in spirit, to the selling of my books and eBooks. Being competitive with prices and with products is of the utmost importance if I am going to make any profit, or if customers will keep coming back to me for the quality of my content instead of going elsewhere. I already have a few ideas, from your post, about "enticing pricing" which I could start advertising on my blog and applying to the texts there.



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DarthHazard

It's difficult and more than likely, if you try to even enter a pricing war with a large corporation like Amazon, Walmart or BestBuy then you will just get priced out. You just cannot compete with their cost cuttings which allow them to charge low prices for their items. I think the best thing to do in such a case is to improve the other aspects of the business or store. If you can manage to have excellent customer service and your store is immaculate then you will create loyal customers who are happy to pay extra as long as they get to enjoy your store.



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overcast

I think empathy is something on which the companies can't compete. That personal experience can be given only one on one. And for this I think people have to treat the customer the right way. You can see that in order to compete with big companies, we have to give such good experience to the brands. And based on that we have develop ahead. This type of effort won't be easy though. We just have to work harder and find out how to treat the customer right in due process.



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Judas2018

You cannot compete with these bigger retailers in theory. So the best idea to sell in the online e-commerce space would be to start up a personal brand. Then market that brand. The positives behind it, the story, its origins, etc. People will then buy with you not only because you offer them a good, fair price. But also because they enjoy your brand and the specific merchandise you offer.



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Corzhens

I heard this concept from one of the most successful businessmen in our country. That when your business is small, that means you have a smaller overhead than a big company. In that case, you can do a little sacrifice of slashing the price of your products. You will notice that Chinese businessmen are willing to give you a bigger discount. That is their way of engaging the buyer to be a customer – a buyer that will come back. When you are doing that every day, for sure your business will grow bigger.



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