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how to deal with competitor who starts price war?
 

my situation: competitor seems to be inexperienced, lowers price insanely, say we are all selling for $50, in order to beat me he jumps to $25.

i hate price war but thought i should not show any fear, i can always match his price for a while,just to give him some psychological stress, then maybe write him to settle on the price but i feel he just wants to drive me out of market. i don't want to always sell $1 lower than him to make him mad, don't want to trigger hate that he starts dirty tricks like reporting me to ebay, leave negative fb etc.

i am already working on providing better product, better return policy, better pic and description. but what are other strategies out there? thanks!

It drives me crazy sometimes too when people abruptly drop prices but in the case sometimes your feedback in that particular item will help you stay competitive. Buyers always look for what is worth spending money on.

Are you selling a commodity or a branded item.

If it is a commodity and the market is saturated with sellers, you will have no choice but to compete, even 1 cent less can make a difference.
You have to also take into account your margins, if s/he is forcing you to lose profits then you will need to stand your ground (your desired price) and wait a bit longer to make a sale.

If the latter, just stand your ground, your item will eventually sell - just make sure it is still competitive with the avg. market price.

You can also consider multiple listings - allowed by eBay, such as:
sell various lot amount and with variations (this is unfortunately only applicable depending on what you are selling)

thanks very much for your reply. i'm selling branded item. but since we are selling pretty much same products, having similar feedback profiles and return policies, is there anything else i can do besides price war? i'm already throw in 0.99 auctions to draw attention to my shop.

speaking about multiple listing, i'm already listing variations (like one item with different color/size), and list good till canceled, that way i keep my ranking on the top. how else can i take advantage of the variation listing? i mean before ebay "promoted" variation listing i used to list multiple duplicates that way when buyer do a search they see lots of my listings. so are you saying this way still helps - like i just have to be creative about duplicates so that they don't get removed by ebay?

yes i really think those sellers are inexperienced. they actually don't have to jump that much at all so everybody gets some profit. my competitor is even lowering items that he sells unique which i don't have - what's the point...

i have similar feedback like him, both 100%. i actually know one of his product is 100% ⊗⊗⊗⊗, but hesitating to report him - dirty tricks can eventually back fire, don't want to start it first.

I wouldn't call this a price war. They want the business and lowered their price to get it. if you guys can drop $25 on the price of a $50 item maybe you were both overpriced

NEVER EVER EVER EVER MOTHER FLIPPIN EVER CONTACT A SELLER TALKING ABOUT PRICES.

I got kicked due to this problem and it was QUITE A BIYATCH to get back to selling.

This price war thing is something that should not happen... but people do it anyways.

Basically if you attract the kind of customer you want to attract based on the price you set. Bottom feeders go for cheap cheap and cheap. Good buyers want more quality and doesn't mind to pay a little more.

So I'd focus more on a price point that you are comfy with and present the product with good descriptions, good CS and shipping.

Go real low like $15 and watch for him to go $14 and then go back to $30 or whatever your start point is and wait for him to sellout at silly low price....:thumb:

maybe add a free gift? one that costs you not alot but looks qood quality...

i don't agree with that, there is nothing called overpriced - apple may be very overpriced.=} you either make profit by quantity or margin. i don't sell cables that makes a few bucks but sell 100 a day...

really? more detail? like he report you to ebay - but why would ebay care if you guys settle down on a price - i mean better than price war and ebay makes less money right?

yes, trying to do that, problem is he is a trs already and has similar description, pic , cs and feedback. i mean i can say in my listing that if price for something like this is too low out there you better watch out for ⊗⊗⊗⊗. but i hesitate to point finger at him in any kind of way, don't want anybody to take a close look at my stealth account either

yes! that sounds like the strategy i'm doing now. always match him by 10 cents lower, then when it goes really low end my promotion and return to the high price. there are buyers out there who thinks higher price, higher quality, buy cheap, buy twice

sounds good, i'm including a flyer which offers discount codes for them to use next time, also wrote very nicely in the flyer, made clear that they could return anything within 14days.

then when my other stealth is mature, i will flood some 0.99 auctions in, let him wonder where the hell are these different price jumpers from, and get the psycho stress like he did to me now.

but really, my dark side calls to bring him down because i clearly know he is selling counterfeit. well, deep breath and control:amen:

i'm using different tactic now. this week i just match every cents of his price, when he go for a promotion, i do immeidately the same with same percentages off. when he's promotion ends, i end mine too.

that way i hope to send him a signal "you jump, i jump, you don't jump, i don't compete".

will see how it goes. if he doesn't get it or ignore it, then i follow until he goes really deep, then i jump back to normal price and let him sell super low.

he is really hurting the market now all buyers think the item is overpriced and are getting used to wait for the price drop, which he does every second day.

:thumb: good luck

thanks! i should be patient, be prepared for a few battles :)

Maybe you could use stealth account to buy like a quantity 50 from him - then string him along to tie up his inventory. Tell him you were hit by a bus and will be in the hospital for a couple months and will pay for it as soon as your wife deposits the disability check to your paypal backup account.

That is how economics works. Let him sell his inventory at a low price. He will run out, then it is not a problem. Don't message him about price fixing. It will get you banned, and is illegal and a punishable crime.

An experienced marketer as myself understands that if you live by Price you will die by pricing.

Never get into a price war unless you are Walmart.

Try offering a longer guarantee, faster shipping, better service, 2 for 1 sale, etc... There is always something that you can use to seperate yourself from a competitor.

I don't ebay so this info may not apply to you.

that is a good idea :) anything to irritate his inventory might be useful - but i'm so new to stealth, all my stealth accounts are so new, i thought i'd rather wait instead of let anything backfire - assume he can easily report me to ebay when i buy 50 from him and don't pay:juggle:

meanwhile with me following his price war closely and improving my listings at the same time, i am winning - at least he stopped to jump super low on the price, for now, maybe noticed that a war like this is not going anywhere.

thanks, i see it seems messaging about price is not a good idea as also mentioned by someone above.

well, he'll get new inventory as well - or will he not then that'll be good for me:amen:

i even kind of know where he gets the inventory from. when i grow bigger that i can afford to order large quantities, i can probably cut his supply, at least to some extent. but now, have to wait patiently, build on fbs.....

yes you are fight. i'm doing both. i don't want to get into price war, but just want to show an attitude, like i'm not afraid of you starting price war, i can follow a little bit, doesn't mean i'll jump all the way. that way i see he also got the message and is now getting back to normal pricing - for a few days now. will see.

the next i will do is definitely pay for making professional nice pictures, service is something which will play a role in the long run, but first to get new buyers, to have a super professional image is important, i'll hire models and throw in some magazine like pics, bet he'll get shocked:clap:

Watermark your photos with "USA SELLER", and watch your items take off like a Rocket =}-