Fight Back, De-Commoditize Your Product Line

By Andrew J. Birol, President, Birol Growth Consulting, Inc.

Regardless of whether you see the Internet as everything or nothing, one thing is for sure. If you sell or distribute a commodity, you simply can’t ignore on-line competition. Certainly your customers aren’t. Everyone knows a marketplace or an auction site where you can get a great deal on consumer goods or business products.

If your customers think you sell a commodity, you have a dilemma:

  • If you go on-line, the Internet will eliminate any price advantage you enjoy. And if you are a distributor, it may eliminate you altogether.
  • One the other hand, if you don’t go on-line, your competitors and your customers will anyway.

Here’s what you can do. For years you have said that because of your extra service, experience and expertise, you don’t sell a commodity. You can prove this on-line. Actually, the Internet does give you opportunity for differentiation. Here’s how:

  • When selling your product, offer information of value, explaining why your methods of doing business matter to the buyer. Link your product to this information.
  • Use (FUD) fear, uncertainty and doubt, to caution buyers on switching to unknown, unproven or lowest price competitors.
  • Price your service, delivery and advice separately from your product. Offer service, warranty, installation and delivery services on an additional, a la carte, basis.
  • Recognize that most Internet marketplaces commoditize products to explain them efficiently. Avoid the services that give your product no chance for explanation.

The way to make your commodity products survive and thrive in a price-sensitive, on-line world is to do what you always have done. Differentiate yourself, charge for value and give your product and company the same respect you expect of your buyers.

Articles by Birol Growth Consulting are © copyrighted and all rights are reserved. However, articles may be reprinted with prior written consent if attribution is included as follows:

© Copyrighted by Andrew J. Birol, President of Birol Growth Consulting, who helps owners grow their businesses by growing their Best and Highest Use ®. Andy can be reached at (412) 973-2080, by email at abirol@andybirol.com, or on the web at www.andybirol.com.


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