Lowest price loses in the end! Why you should not use price competition as a strategy for success in retail

The electronics industry faces its doomsday, and it has done so for many years. Ever since the German giant Media Markt had entered the Swedish electronics market, it was a difficult and ruthless price war. The losers were and therefore are numerous; countless Swedish chains have fallen into battle. Latest to fall is Siba, before that it was Expert along with the enchanting OnOFF. Forgotten and without tombstone. Nowadays, it can be said that Media Markt will most definitely surrender Sweden and then sell on its 27 stores it occupies. So what was the stage that all of this in the end, one might ask? Mainly because it stands now, everyone loses – the industry has gotten a lot of stick, nevertheless the consumer haven’t survived unharmed. Despite the fact that there were constant sales and negative margins on electronics customers over enjoyed over time, the day originates in the event the vendors have to start charging for that party that has been. Customers have to prepare and recognize that the periods each time a TV or cost $299 Greenbacks are gone and so they really should not be surprised whether it surpasses that price by double.

To vendors and retailers: don’t be afraid to charge for your hard work! Set prices that may cover your expenses, depending on your role available in the market, the type of the products and services and how your competitive situation looks. Dare that will put prices across the scandinavia. Assume you may be instructed to go aspects of your inventory, production loss and other circumstances that may put your business at an increased risk. Other might hopefully follow.

Will the winner always be the one which is underselling and reporting losses to reduce the competitors? It absolutely does not have to get that way. Pack the services you receive or goods so that you simply offer added value and grow unique within your delivery or find your own personal niche by providing package solutions and services that aren’t exploited. Here there is a golden middle ground in which the overall experience is bigger compared to the sum of your packaged parts. Be sure each delivery provides over the client expects. Seems like a no-brainer? Well, this can be something can’t buy let’s say you sell without having margin of profit. Nokia’s that can handle complaints with “I will ship which you new product, and you also do not even have to return the defect” gets not only long-term customers, but also almost completely eliminates the expense of complaint handling. Be sure you have a very higher margin on your own products which you will find the possiblity to give your major customers a free discount, thus running temporary promotions, launching new products and packages, with a retained base margin.
You’ll never lose customers by lowering your prices, but a necessary sudden forced increase may be devastating for the usage.
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