marketing, retailI started selling products from various manufacturers in my niche. For some of the manufacturers, I’m a distributor, and for others I’m a reseller.
Opportunity to become a distributor for some of my highest selling brands has ended, so I’m left as a reseller. My competitors are distributors for these products, so they get better pricing and are able to give better deals. They also sell directly to market.
The problem:
Not only do they get better pricing, they also sell practically at-cost. Way below retail and well below my best pricing levels. I provide support, but so do they. I have better stock availability, but that doesn’t exactly turn heads. What can I do to compete?
One way is to do the same they do. What’s happening is they’re offering what you sell at cost to attract customers, and earning money by selling higher margin products to those customers through up-sells, cross-sells, and repeat-sells.
Another is to be mighty better than they are at getting attention. If you’re all over the place online to the point where customers mostly find your business, you’ll be fine. I imagine you don’t fit well in this box though - the supplier picked another company as their distributor for a reason.
Yet another is to deliver value-added services. If you bundle the product as part of a solution to something, rather than a mere product on an as-is basis, you can command much higher margins.
If this is an established market with savvy price sensitive buyers and they have a lower cost than you and are willing to sell at low margin then nothing you can do. They got in early when the manufactures needed distributors and they have an advantage. Don’t try and compete head to head. Having stock is going to get you sales from people that need that stock now. Small margin and keeping a big stock is is not profitable. Look for new products and manufactures. Get in up front and be a distributor.
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