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Don't Just Compete On Price

by Daniel Jones

One common mistake that new sellers and many eBay sellers make is that they feel that they have to compete solely on price. This misconception causes many people to fail with drop shipping before they even get started.

Think about traditional retailing for a moment. Wal-Mart can always get lower prices than any other store out there because they buy billions and billions of dollars worth of inventory. How is it that any other store out there can still exist when Wal-Mart can beat all of them in price?

The answer is this - other stores do NOT compete against Wal-Mart in terms of price. People shop at others stores for many reasons:

- They like the atmosphere.

- They like the better service.

- They are willing to pay a higher price for better quality or higher perceived quality.

- They crave luxury or the feeling of luxury.

- Some people have more money and want to pay more. Why do some people go to fancy restaurants and pay $50 for a meal when they could make the same meal at home for $5? Part of it is the experience that they're getting. Many people shop on the internet, not because they even want or even need the products they are purchasing - often times these people are shopping because they enjoy shopping for the sake of shopping - they enjoy the experience (and many are even addicted to it).

- The list goes on and on. Price is just one buying factor. There are many reasons why people shop at other stores over Wal-Mart. While Wal-Mart wins in terms of lowest price, there are many areas in which they lag. Similarly, there are many reasons why someone might purchase a product over the internet at a higher price rather than pay the lower price. Recently, I bought a laptop battery on the internet and paid $7 higher than the next lowest price because the seller promised same day shipping. The other seller, with the lower price, wasn't going to ship it until the following week! I needed the battery right away and I was willing to pay more.

There are always going to be people that want to pay more and there will always be people that are trying to find the best deal possible. Ninety-five percent of eBay sellers are trying to go after the group that wants the absolute lowest price. That's why so many sellers aren't making money on eBay.

It's important to realize that there is still a big group of people that have more money and want to pay more. Don't disappoint these people! You can sell your products for more if you want. In order to do this, you might need to improve your listings and make them appeal to people that want to pay more. Maybe pick products that you can market as more luxurious or higher quality. Maybe focus on a certain type of product and figure out how to sell it for more money before you move on to other products. You'll probably also want to make your pictures and descriptions stand out from your competition. You'll also want to make sure that you offer the best service possible at all times.

Here's an Insider Secret that will prove extremely valuable to you once you understand it: The savvy Internet sellers/marketers use eBay to gain customers for future sales, while many novice sellers are trying to make a full time or substantial part time living off eBay alone.

Don't let your competition fool you when you see something priced ridiculously low! Often, they are selling for a small loss, known as a "loss leader" to get customers in the door. At the same time, they are keeping their competition (you) out of the market.

You see, the novices try to make enough money off the initial sale and then they don't even bother to provide those customers with additional sales and service. The novice is just interested in making a quick buck. The savvy sellers are interested in much more than a quick buck. The savvy sellers are interested in building a business. They are interested in gaining customers and keeping customers.

You can always spot a novice seller by the words they use. Novice sellers say things like "I need to make at least 40% off each sale to even make it worth my time." and "I saw that product advertised for less somewhere else; I can't make any money."

Savvy Marketers know that marketing is the process of buying customers. Savvy Marketers know that eBay is one advertising channel you can use to buy a customer. Savvy Marketers are not interested in making a killing off the initial sale, rather they are interested in gaining loyal customers from which to make many future sales.

When you have your own niche market, you don’t have to worry about selling for the absolute lowest price. This is because your customers are coming to you for your expertise and your service. If they wanted the absolute lowest price, they would go to Walmart. They are coming to you because you have something else to offer them. Perhaps it's better service. Maybe you specialize in a certain type of product and the customer knows that he/she can come to you for expert advice as well as excellent service. Maybe your customer wants to buy from you because you provide them with a better shopping atmosphere - they can shop from the comfort of their own home and they find your website / store/ auction listings appealing. Maybe your customer wants to buy from you because you offer super fast shipping. By the way, you probably picked us to handle your drop shipping needs because of our fast ship times. Of course, your customers will attribute this exceptional service to you. They will often leave you positive feedback, tell their friends positive things about the products you offer, and come back to you for additional products.

Think about how many millions of dollars big businesses spend in advertising. Do you think these businesses are interested in spending all that money to get each new customer they obtain to purchase just one item from them? Of course not! Obviously, big businesses are interested in spending all that money to gain loyal customers. If all they cared about was getting customers to buy one item from them, all those millions of dollars spent on advertising would not pay off. They would be wasting their money.

Similarly, once you see eBay as another advertising / marketing channel, a whole new world of possibilities can open up to you. You begin to realize that the eBay fees you pay are simply the cost of advertising to gain a customer. Even if you are only making a small amount of money on each sale, what you are really doing is getting paid to obtain a customer.

While a novice seller will see making a small amount of money on a sale as "wasting my time", a savvy seller will see the same situation as getting free advertising and getting paid to obtain a customer.

The real payout is when your loyal customers purchase more products from you through your website. For all these additional sales, the advertising / auction fees have already been paid for when you obtained these customers. Making sales on the backend through your website is the real gravy for your Internet business.

If you want to learn more about Building a Super Successful Business without trying to compete on price, we have a lot of Premium Education for members only that you will find Extremely Valuable!

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