Once upon a time, the image of a competitive market centred on a global firm, its smaller opponent, and their war for the hearts and minds of the public. When we look at modern corporate competitiveness, such assumptions appear to be a thing of the past.
Companies are filling (and even overwhelming) every market niche. It is still a war for the people' hearts, but the equipment and techniques employed are vastly different.
The more the competition that the market has, the more potential it brings. There is potential in a competitive market for you to make money, but the better question is how you can stand out in the competitive market.
It's natural to believe that organisations with a lengthy history of serving a marketplace have it easier. But that doesn’t hold true for most businesses. Whenever an organization "sits back," whether established or not, something better comes along to knock it off its throne and take its place.
Netflix's dominance over Blockbuster and Samsung's dominance over Nokia, all highlight the marketplace's natural development to evolve with the times or become derailed by the newer and better competition.
Today's startups have a difficult time building a name for themselves in the marketplace. However, in the long term, it is this competitive climate that will offer you an advantage over the rivals.
How to leverage your competition?
I think competition is great in a business, because the more competition a business has, it means there is more potential. There are more customers and the more competition the market has, your competitors also make it easy for you to enter now.
They've done the work, they’ve warmed up the audience, and they've made people comfortable in spending money to buy the kind of products that you sell.
A better question is how you can leverage that competition. The way to leverage it is to stand out in a competitive market.
To do that, you should either create something unique, which is very niched down. Let’s think about this... Cars are a very competitive space.
There are so many car brands out there today specializing in sustainable or electric cars, but 10 years back, if you would have started an electric car company, or a sustainable car company, you would have niched down.
The competition would have been a lot lesser and you would have had your own blue ocean. However, 10 years back there weren’t many opportunities for electric cars. The opportunities are high only where the competition is high.
The third thing that you can do is fill some gaps in that niche. You have to figure it out by going through the reviews of your top competitors, especially the negative ones, to figure out what your competitors are missing and what they could have done to make it better. If you can fill those gaps, you can build your brand’s USPs, and you will be able to stand out.
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Make good money in your business even with tight margins
You can make good money in a business with tight margins by doing the following things:
1. Upsell to your customers. Let's say someone buys a t- shirt about golfing, you could either upsell them a different t-shirt which is about golfing. You could upsell them the same T-shirt about that but at a discount, so that they can buy it for a friend. You can also upsell them a golf club or a golf ball, or a golf course that can help them become better at golf. Upselling will definitely help you increase your margins.
2. Try listing bundle offers. Instead of just selling a golf t-shirt, what if you sell a golf t-shirt plus a pair of shorts for golfers or a golf t-shirt along with the golf club. If you create bundle offers it’ll substantially uplevel your margins.
3. Have automation in place in terms of email sequences, SMS sequences, push notifications, so that every time someone buys from you, even if you've not made a profit, you can potentially make profit from them after they become a customer of yours through the emails and SMSs, which is called back end marketing.
4. Start a referral program for products you're so confident about that people are going to love it. A referral program where after your customers buy the product, they can refer you and get you clients and they get a commission out of it. You could profit well through this process because you're not really spending much on marketing.
As a whole, it all drills down to how good your product is. If your customers love your product, they're gonna continue coming back to you.
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