You will Always Lose in Price War

By Fadila Aziz · 26th November, 2014

When you starting a new business, first thing you will get shock with price war in the industries, especially from marketplace and social media platform. You wish to join the price war, but bear in mind you will always lose in this battle.

"You’ll always lose a price war", the question is WHY??

# Easy but not easy

Its sound easy, just reduce the price, but as small business do you wiling to lose you profit? Big company willing to do it, they have resources, margin and money. They still can compete with other and win the battle , but as small business ? This is what we call as Suicide.

# Customers still expect a high quality of service.

Low price does not mean low quality in service , even you selling with RM1.00 customer will expect a good service from you as the item worth RM1000. As merchant you might required to cut cost here and there to cover everything up, it will effect the customer service also.

# You lose because of customer

Customer always look for cheap price, if you willing to follow their rhythm you will not making any profit and might not able to survive in this online business industries. Find you rhythm and start play with it.

# Stuck forever with price war

Some merchant might plan to increase the price later once you get exposure, oh ! good luck with that. Once your customer buy the item with low price, they will expect the same price in future. As merchant by compete in price war , you show that you still can survive and you customer never know that you actually struggling to keep the business alive with ZERO profit.

What should i do ?

# Compete on customer service,

You may offer fair price but give the best customer service, it will help create bond with customer and at same time customer willing to be your regular customer, because of the service not price. new customer is good, but return customer is thumb up!

# Be Creative

As merchant you need to be creative , create a promotion which is irresistible for your customer. Combo pack with free shipping, buy 2 entitle to have 3rd item 50%. Think out of the box.

Find you own rhythm , make it alive and your customer will willingly follow it. if you cannot compete with them, play with them.