Ecommerce Web Design Blog

How to compete against larger competition
When you are in a market competing against much larger competition it can be easy to get demoralised and feel like you are in a David v Goliath battle. Sometimes the larger competitors will be very afraid of smaller competitors entering and taking their margins and resort to 'competition bashing' instead of trying to compete on what they can offer.

Competitive environment: Are your competitors using "FUD" to frighten your potential customers?

If your competitors are using FUD ("Fear, Uncertainty and Doubt") to try to knock smaller competitors out of the market then it's usually safe to assume that those larger competitors have noticed the smaller players like you and they are probably having an impact on their bottom lines. You should always take FUD as a complement.

How do you recognise FUD?  When larger competitors have promotional statments on their website like "Don't buy from small competition - you don't know who you are buying from", "Unlike others in the marketplace we are not a small backyard business", "Who knows what you will get from a home based business", "Buy from an established business like us not a one man band", then you know that you and other smaller competitors in the market have been noticed and are probably having an impact on those businesses' bottom lines.

Even if your competitors are using FUD techniques (it's not common nowadays fortunately but still happens) you can still compete effectively with some lateral thinking and good business instinct.

So how do you compete with larger competitors? Some ideas...

1. Find niches. If you compete head to head with larger competitors who are well established you may struggle with margins and their established product range. But they are probably not covering every corner of the market. Find a profitable segment that is not well represented by your competition and focus on that.
2. Build loyalty. When your customers do buy from you keep them coming back. Make their buying experience excellent and deliver outstanding customer service.
3. Personalised service. Larger businesses find it hard to deliver personalised service especially online. Keep your customers informed of their order and go beyond what they expect if you can. How many times will the owner of a large online business be able to respond directly to customer enquiries for example? This will help you build loyalty (see above point)
4. Use promotional tactics to gain market share. Offer a popular product at a loss for a special promotional period to get customers to your store for example
5. Ensure you are using the best shopping cart possible for your business, that it has an appealing design and have loaded it up with all the marketing add-ons you can afford.

Remember larger competitors were smaller once. How did they grow? Chances are they faced similar challenges as they grew but overcame them by staying focussed. Take a leaf out of their book and stay focussed.

Our final words: As far as we are concerned, it is absolute rubbish to say that a small business can't compete as well as a larger one - especially online.  Online business levels the playing field in terms of competition - a great shopping cart combined with a great offer can help you be just as successful as the offerings of larger competitors if you market your product innovatively to the right market and build traffic. 

Also don't forget that some very large businesses are still owned by just one person - so if you're not registered as a company it doesn't mean that you're not a big player in the market. Customers buy on a number of things so do it better than your competitors and people will keep coming back.  Prove those who doubt you wrong!

It is common practice for your ecommerce website provider to put an acknowledgement of their shopping cart software as a link at the bottom of your website.  One link is fair and enough, but what if your web design or ecommerce provider is filling your footer with spam links?

The link at the bottom of hosted ecommerce websites site is a useful search engine benefit for the shopping cart provider and a fair acknowledgement that they have provided the shopping cart product to you that makes your website a success. But why would they need multiple links all with similar but different names in customer sites? In our opinion this is very poor business practice.

It is therefore a good idea when buying a shopping cart website to visit the portfolio of the ecommerce provider and look at the links they place at the bottom of each site - is there just one or are there a multitude?

Osc Works only puts one shopping cart software or web design provider acknowledgement on each site we produce. Never more.

 

With margins squeezed and competition fierce, many people in business are under much higher levels of day-to-day stress than they once were. It is very easy in periods of extra stress to get frustrated with your suppliers and be overly demanding when you are ordering something, making an enquiry or when you experience delays in receiving product.

The thing that is often overlooked is that these suppliers are businesses just like you and if you are under stress chances are they are too. After all, in most cases they deal with many stressed out business owners every day - not just you. 

The secret: customer service  is not just about how you deal with your customers. It is about how you behave as customers too.

With this in mind, the way to get what you want from your suppliers is to go back to basics and the more stressed you are the more understanding you should try and be. Particularly at Christmas. Don't just demand, ask politely, and when you get what you want, say thank you. Sounds all too simple? It is, and it is always worthwhile to remember this when dealing with any supplier you are working with. A little humility and understanding helps build long term business relationships not simple one-off supplier/buyer transactions.

Here are just some quick tips to get you thinking. You could try when you are next dealing with your suppliers:

1. After you get your products, write them an email and say thank you. If you are impressed by the products or the packaging or their service, tell them.
2. If you receive a positive comment back from a customer who your supplier has dropshipped to, pass it on. When under stress complements matter. Don't you enjoy receiving them for your business?
   
3. Suggest something useful that could help them run their business even better - great ideas and suggestions are always appreciated by any business.
4. Refer a customer to them or write them a testimonial for their website - no business would ever turn down that!

Customer service and supplier service is not rocket science. Just good business practice.

Whether you are selling online or offline, pricing your products is a key part of doing business.  What methods can you use to price your online products? Here are a few tips you may wish to consider.

Some common methods to price products include:

• Cost-based pricing (also called cost-plus pricing. this is the price that you paid for an item plus a mark-up)
• Market-based pricing (what your competition is selling items at)
• Value-based pricing (what your customers value your products at. You may apply a premium to reflect your brand, to depict quality or the value of your product in the marketplace)

In practice, the price you place on your products will often depend on a combination of the techniques above.  There are also many different strategies that you can use to price products depending on your objectives in the market.

For example, if you are a new business online you might run an introductory sale, you may have some products of popular items priced equal or below the competition to get people to your store and other products priced using value or cost-based pricing. 

Some  online businesses also use a technique called a loss leader of pricing one product below cost to match or better competition, to get people into your online store and looking around. If they buy that item and you can cross-sell it with others, you could build up a sizeable cart and make a profit overall, even if one item is sold at a loss. 

Whatever you do, make sure you look at the prices of your products as a whole and not only individually, as it will depend on your competitors, your products, your shopping cart website, your advertising and your brand as to whether customers will be prepared to pay your prices.

If you are looking to start selling online, finding the right sub-market for your products can make the difference between a store with average performance and super-success.  In slower economic times with intense competition, some time spent on finding a maket niche for your products and services is time well spent.

So how do you determine your niche? Here is a quick checklist of ideas to get you started.

• Look by supplier:  try to find a supplier that nobody else is using. If the market is flooded with products like yours someone selling your product in a unique way could really appeal to your target customers. When evaluating suppliers always try to put yourself in your customer's shoes: what would they think or feel about this product.
• Look by competitor: review all of the products and services of your competitors. What features and benefits do they have? What things are missing? Do they cater to all segments of the market? Just because a particularly profitable segment is full of competition does not mean there is not room for you if you have a unique selling proposition to that market. For example, a shape that hasn't been seen before, extra service, a different way to pay for the product, being bundled with something else.
• Think about what you are passionate about. An angle or unique spin on your products that you are passionate about will show up in the way you market your products. Customers are very good at telling the difference between marketing waffle and a passionate description about the particular benefits of your product (and why they should buy it online from you)
• Make sure you choose something that you are knowledgeable about. Especially if you're up against tough or well established competition, solid knowledge of the ins and outs of your product will help you stay on top of your product as well as in dealing with customer questions from your website.
• Look by keyword. Think about what customers search for and optimise your site on those keywords. If it is a phrase that has been overlooked by your competitors, even better.
• Look by packaging. Could you package the product differently or more innovatively than it is now?
• Look by channel. Is there a product already well established in the market but you can deliver it in a more innovative way? e.g. could you dropship it to lower your costs of holding stock and offer sharper prices? 
• Could you sell it wholesale instead of retail? Or vice versa? What are your competitors doing there?
  
• Research, Research, Research. As in any business venture,  make sure you thoroughly understand the market, whether there is sufficient demand for your product and any legal or technological barriers before getting started. Make sure you create a marketing plan, and have the best shopping cart software for your website too.
  

Above all, stay passionate, stay focussed and turn your niche market into a success. Don't let competition stress you out. Relax, have fun and let your personality shine out in the marketing of your product. The more others compete with you, the more it validates that your niche is a good idea!