Question

Topic: Strategy

Pricing Strategy For An Internet Retailer In A Competitive Environment

Posted by Anonymous on 7/12/2004 at 4:29 PM ET 175 Points
My company sells office supplies to other companies through phone and the internet. We are #3 in the market, and usually follow the two leaders regarding pricing (depending on the size segment of companies). We offer a better service than our competitors, and our customers agree on that.
We sell some "almost commodity" items (paper reams, HP cartridges) and some less price-sensitive products (staplers, etc.).
Our margins are very low, both in an absolute way and relative to our competitors. This seems to be due to size (purchasing power) partially, but we believe it relates to pricing strategy.
How should we define our pricing strategy? Why are our margins lower? How should we react to our competitors' price movements?
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RESPONSES

  • Posted by Blaine Wilkerson on 7/12/2004 at 4:39 PM Member
    It may very well be a branding issue. Basing a strategy on price alone can be a fatal mistake....even with commodities.

    May we see your site (and your competitors)?

    Thank you! I'll keep an eye out for your response for a couple of days.
  • Posted by Blaine Wilkerson on 7/14/2004 at 11:37 AM Member
    Which site is yours?
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