Making price claims v competitors

[BGARK]

Ok, so you see it all the time with Tesco, Asda, Sainsbury and the like. How they will offer a better price than the competitor. I assume they don't all sue each other when making such claims?

So I want to do something similar in my own small way by messaging some trade companies I know in the USA. Basically I will write them a letter something along the lines of:

You currently buy X widget from X company at $100 less 35% discount.

Please buy X widget from MY company at $100 less 45% discount. In fact our widgets are also better quality, blah blah, so win win for everyone, yay!

Can anyone see an issue with this?

[Birkin1932]

I think you will have a major issue when you say yours are better quality. You are basically saying your competitors product is inferior

[BGARK]

Birkin1932 said:

I think you will have a major issue when you say yours are better quality. You are basically saying your competitors product is inferior

Good point I will probably mention the new features, benefits rather than simply saying ours is better.

[Jasandjules]

As above, simply state the facts.

[Sheepshanks]

BGARK said:

You currently buy X widget from X company at $100 less 35% discount.

How do you know what discount they get?

[BGARK]

Sheepshanks said:

BGARK said:

You currently buy X widget from X company at $100 less 35% discount.

How do you know what discount they get?

I received the details from one of their customers, which led me to the decision that I could easily under cut them. Plus they informed me the quality has reduced drastically.

I only intend on doing this in the USA where we currently don't sell any of these particular items. Hence why there isn't a lot to lose.

[Sheepshanks]

BGARK said:

Plus they informed me the quality has reduced drastically.

Why not lead with the quality angle then?

What does an extra 10% discount mean to your gross margin?

[BGARK]

Sheepshanks said:

BGARK said:

Plus they informed me the quality has reduced drastically.

Why not lead with the quality angle then?

What does an extra 10% discount mean to your gross margin?

I will try with the quality angle, ideally could do with a good USA partner but will consider later.

Margins are very high, volumes relatively low, niche market.

I might also consider this as an introductory or January only deal for the higher discount. I know they will come back again after their first purchase.

[Wilmslowboy]

BGARK said:

Sheepshanks said:

BGARK said:

You currently buy X widget from X company at $100 less 35% discount.

How do you know what discount they get?

I received the details from one of their customers, which led me to the decision that I could easily under cut them. Plus they informed me the quality has reduced drastically.

I only intend on doing this in the USA where we currently don't sell any of these particular items. Hence why there isn't a lot to lose.

I would tread carefully on using "confidential" pricing/ discount information received 3rd hand (best check out US law)

I worked for one of the large companies you mentioned above, and under the compulsory competition/ bribery training we received, we were explicitly informed to never use/ share any competitor information that was not explicitly in the public domain.

To be fair this was a large business with a position of near dominance.

[VEIGHT]

Dear widget buyer,

We know the thought of a new supplier isn't always at the forefront of your mind however we hope the below discount with give you a good enough reason to give us a try.

Compared to the main competitors we can save an average of XXX $$$'s

We also have XYZ features in our product, blah blah

Hurry though as offer ends 31st Jan.

Best regards,

Widget Seller

PS - order online and receive free delivery too!

Or something like that???

[hotchy]

Would you not be better giving them a free sample to see the better quality with a better price list? If some person randomly emailed me offering better price etc id just ignore it thinking its a load of old tosh and expect there product to be inferior.

Also id watch with the price cuts. If your business has a high profit margin, then so will your competitor, before you know it people will be selling on ebay for a loss. Better to fight for custom with quality, not get involved in the race to the bottom.

Better quality, same price, i now who i would choose everytime, and when he drops his price they will still choose the higher price, better quality product. I do it every week.

[BGARK]

VEIGHT said:

Dear widget buyer,

We know the thought of a new supplier isn't always at the forefront of your mind however we hope the below discount with give you a good enough reason to give us a try.

Compared to the main competitors we can save an average of XXX $$$'s

We also have XYZ features in our product, blah blah

Hurry though as offer ends 31st Jan.

Best regards,

Widget Seller

PS - order online and receive free delivery too!

Or something like that???

I like some of that, thank you!

[BGARK]

hotchy said:

Would you not be better giving them a free sample to see the better quality with a better price list? If some person randomly emailed me offering better price etc id just ignore it thinking its a load of old tosh and expect there product to be inferior.

Also id watch with the price cuts. If your business has a high profit margin, then so will your competitor, before you know it people will be selling on ebay for a loss. Better to fight for custom with quality, not get involved in the race to the bottom.

Better quality, same price, i now who i would choose everytime, and when he drops his price they will still choose the higher price, better quality product. I do it every week.

Some fair points, a free sample is a bit tricky due to the cost of each item.

Our quality is absolutely superior, and if I was targeting UK companies I would simply phone them up and negotiate. I don't feel comfortable doing that with US based companies. Most of them don't understand English!

I have gathered a few ideas to get the ball rolling, even if just a very low price to almost cover the cost of sending a single sample. If they are not happy I would refund 100%.