Public research shows that approx. 80% of shoppers compare prices online before shopping in stores.
This is destroying the profit margins for a lot of online stores, but a small Swedish company has developed a way to benefit from the increase in price comparisons.
Swarm of intelligent bots constantly hovering the competition creates unfair informational advantage for e-commerce entrepreneurs.
All warfare requires intelligence. Spies. Radars. Drones. Satellites.
The side that has a clear informational advantage will almost always win.
E-commerce competition is tough. Perhaps not warfare, but close enough.
Imagine if you had near-perfect information. Imagine that you always knew the prices and stock-level of all your products on all competitors sites.
Imagine that you had a swarm of intelligent bots constantly hovering above your competitors sites at your command.
I bet you would be able to formulate a strategy for complete market domination.
We have a strategy that you might choose.
The strategy is deceptively simple:
First steal all the customers
Undercut your competitors with razor thin amounts to steal every price comparison customer.
“Bankruptcy by a thousand cuts”
…then make all the money
Make monopolistic profits the minute your competitors runs out of stock.
“the Temporary Monopoly Price Hike”
Constantly and immediately undercutting your competitors prices by micro-amounts will surely drive them crazy with frustration and most importantly; steal all the price comparing customers under their feet.
And then – adding insult to injury – the minute they accidentally run out of stock – taunt them by raising your prices and cashing in.
That doesn’t sound overly complicated does it?
So why isn’t this being done by everyone already?
Well…let’s try a little exercise.
Start up excel.
Make a list of all the products you sell.
Make a list of all your competitors.
Go to your competitors sites. Find the exact same products on each competitors sites.
Note down the competitors’ prices. Every single competitor. Every single product.
Compare and check if you are off on price. (Because price-comparison customer will…)
Update your price accordingly.
Now check for that “out of stock” label while you’re there.
If all competitors in the list are out of stock – raise your price. You have a window of time for unreasonable monopolistic profits.
Prices and availability get updated constantly, so do this at least every day. Every hour if you want to make more money.
If you have 2000 products, 4 competitors and each check takes 60 seconds you should be done in 133 hours.
133 hours per day.
No coffee breaks for you!
I think we can conclude that manual labor is not going to work…
…but within that seemingly impossible task lies a huge opportunity.
Imagine that you are the only one in your market with access to the software that makes this happen on autopilot.
Opportunities in the face of price comparison customers
The opportunities in e-commerce retail are huge, but competition is fierce – especially if you are selling the same products as other stores.
More and more customers make price comparisons online, and a very large part of sales go to the store with the lowest price.
When customers rely on price comparison, the go-to strategy for acquiring customers becomes selling the product at the lowest price on the market, and then leverage the sale with up-sells, cross-sells, bundling and of course building a customer relationships for extra profit. This is hard work.
Granted, over the long term you may not want to rely on price as your sole differentiator for the first sale. Over the long term you probably want to pry your customers away from price comparison with branding, and perhaps your own product line, but in the long term we are all dead. What about short term survival?
Razor thin cuts
Right now – in the face of online price comparisons – if you need to get customers in the door, you need to have the lowest price. (Or the price of your choice when you are alone in the market, but let’s discuss that in the next section).
Hurting your competitors by removing their flow of customers – cutting off their air supply.
If the trick to attracting customers is to have the lowest price, then the trick to making profit on those particular customers is to have lowest price by a razor thin amount.
You want to be the lowest price, but there is no point in selling your product for $149 if the second cheapest competitor is selling it for $169. You could be lowest at $168 and still get the sale. You would be throwing away $19 on every sale.
For perspective; just 10 sales per day where you are missing out on $19 because you are not setting optimal prices is $69,350 of bottom line pure profit left on the table per year.
Ideally you would sell each and every one of your products only a few dollars cheaper than your nearest competitor – razor thin cuts.
Temporary Monopoly And Outrageous Profits
Obviously widespread price comparison is not ideal if you want to maximize profits. Unfortunately it’s here to stay.
But opportunities appear if you are observant and fast. (Perhaps even prepared with a software that constantly looks for the opportunity.)
A few days every now and then, you will end up in a blue ocean where the other stores are out of stock, you are the only store that has products available and price comparison is toothless.
With all your competitors out of stock you will have an unusually good flow of customers for a while, with nowhere else to go.
Don’t waste the opportunity.
You have a temporary monopoly.
Raise your prices and profit while you can.
A few customers will wait for availability to come back, but in today’s instant gratification economy – with impatient surfers – most customers will buy right away.
Then, as soon as competition returns, lower your prices back to a fraction below your theirs, and get back to the razor cuts strategy.
Putting it on autopilot
If you know the price of your products on all your competitors sites, all the time, you can always undercut them by a razor thin margins and steal all the price-comparing customers under their feet. You could also make unreasonable monopolistic profits whenever they fail to maintain stock.
Beautiful in theory.
Practically however, this has been impossible until today.
But… we happen to know a very competent Swedish developer, who created software for a large e-commerce company that does exactly that. It uses AI and bots (small pieces of autonomous software roaming the internet) with clever subterfuge to find your products on competitors’ sites, check the price and availability on them all and compile a price report with any suggested edits highlighted every day. Or every hour.
The software is hard at work for a large e-commerce company right now, making them a pile of money.
And the reason we are telling you all of this; that same software is now available as a service to a few more customers.
It’s not publicly available anywhere else other than from this page, and at this early stage it requires manual set up, so only a few new customers will be able to reap the benefits before their competition.
It’s a very complicated piece of software under the hood.
First come, first served.
If you are interested, give us your email, and we will contact you.
We will not put you on some automatic email spam list – we will ask the guy who came up with the idea and wrote the software to send you a single email.
Click here to go to the email form.