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Over the past year, low-price competitors have grown to significant players in all distribution markets, especially online.

Their business model allows them to survive by minimizing operational costs even with very low net profit margins. As a result, the wars over prices are one of the factors that generate the most problems, especially when it comes to preserving profit margins.

Keeping track of the low-price competitors with a monitoring tool is a must-have for any business that doesn’t want to lose market share and profits in the long term. Monitoring pricing strategies used by your competitors, analysing tendencies, and overcoming them is necessary. You can not do that in an old-fashioned way by just randomly checking prices at certain moments of the day. But, how should you act to ensure that you won’t lose customers and that the profitability of your business remains unaffected? In one way or another, a price monitoring tool will offer a lot of support when it comes to setting your strategy.

The staus quo:

  • Emphasize your strengths
  • Adjust your prices
  • Redefine your market
  • Anticipate the future

Emphasize your strengths

Highlight those areas of your business that clients value the most and make them known. The customer should understand why your company sells products at a higher price than your competitors. The idea is to create brand value that makes up for the consumer paying a higher price. In the end, you’re selling value, not price, and this will make you stand out in a sea of low-price competitors.

Adjust your prices

While it may be difficult to narrow the price gap with your competitors, ensuring that the gap is as narrow as possible is vital. You can do this more selectively by focusing on the products with higher elasticity, for example. Above all, avoiding a constant trend falling of downward prices is essential, which is one of the most frequent errors in pricing strategies and can affect your profitability. Another good idea would be to back up this price reduction through cross-selling other related products, helping to improve the sales margin of the main product and compensating for the change in price.

Redefine your market

One specific niche will rarely be an attractive alternative for a large company. Focusing on one sector, in particular, in order to create the appearance of a specialty shop can be very profitable. That allows you to direct your efforts towards potential customers that meet all of the prerequisites for being ideal customers.

Anticipate the future

Developing an effective defense against low-price competitors can be long and arduous. The time that we have spent studying the competition to put a strategy in place will be crucial to ensure its effectiveness. Having a low-price monitoring tool will clear the way and assist you in your decision-making process, allowing you to study different variables related to your competitors and decide which would be the most viable and profitable solution for each case. As with so many other issues that may arise in a business, planning ahead will be the key to success.