Here’s a sad tale I came across in one of the e-commerce forums:

“I sell private label products, and I know for a fact the majority of sellers in my niche, in my country, are using the same supplier as I am. However, I can’t understand how they are able to sell for so low and still turn a profit. The only thing that I can think of is they’re buying much larger quantities than myself and therefore getting a much better price.”

This is one of the most maddening aspects of the e-commerce business: dealing with all the price-cutting and competition. Anyone – your customer, your supplier, your employee can become a competitor overnight. After setting up shop, the first thing they do is to cut prices.

All of a sudden, your conversion suffers, the orders stop coming in, and your customers are buying from the competition. It’s painful and frustrating.

It’s tempting to respond with lower your prices but that’s just a race to the bottom. Very few can win the low-price game. Instead, the more profitable to option is build customer loyalty. It can inoculate your customers from the competition. The fastest way to build customer loyalty is to offer rewards through RewardCamp.

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